(New York)

If you are like most advisors, you probably have some difficulty in identifying which funds you want for your clients. Alongside the sheer proliferation of funds has been a massive near duplication of them. Dozens of funds now seemingly look exactly the same and it is very difficult to choose one from another—even asset managers create cheaper versions of their own funds. Between these incredibly overlapped offerings and thousands of new funds, it also becomes very challenging to find niche funds that exactly fulfill the role you’d like them to in client portfolios. Well, here is the good news—a new company with a hyper-useful tool is solving the issue. Check out Magnifi, they are bringing investment selection into the 21st century. Magnifi uses patented technology focused on natural language search to seek out exactly the funds you need. No more checking endless boxes and drop-down menus, just type exactly what you want and the perfectly matched funds appear. For example, imagine you wanted ESG funds that did not include oil and gas companies. Just search “ESG no oil” and bang, you have ten perfectly matched funds, including the stocks that comprise them, their fees, and performance against one another.

Magnifi also integrates FI360’s fiduciary risk score for every fund, allowing advisors peace-of-mind on the regulatory front when choosing client investments.

FINSUM: Magnifi is nothing short of a revolution for finding and choosing investments. They bring the easy exploration and selection of e-commerce to the world of investment management. Check them out, there is a reason they are being called the “Google for investors”.

(New York)

The market has been doing very well since October 30th, up around 9%. Goldman thinks even bigger gains are coming for the S&P 500. The bank has been encouraged by investors’ response after the election and thinks that the vaccine is really in the driver’s seat. The bank’s research team has significantly upgraded their earnings forecasts for next year and 2022 based on the better-than-expected recovery. According to Barron’s, a few assumptions underpin Goldman’s outlook, “at least one vaccine becoming widely available in the U.S., less drastic changes in policy because Congress is most likely to be divided, and the continued V-shaped economic recovery”. Goldman’s official forecast for the S&P 500 at the end of 2022 is 4,300 and a 20% gain from now through the end of 2021.

FINSUM: The “continued v-shaped recovery” is the most volatile aspect of these assumptions, but they also discounted a potentially positive one—another stimulus package. The forecast seems reasonable.

(New York)

Okay maybe it’s not a “boom” but it is certainly a “boomlet”. Alongside all the uncertainty in markets surrounding the election, value stocks have been having a moment in the sun. The reason why is interesting and seems to be two-part: one aspect is idiosyncratic, the other more macro. On the idiosyncratic front, many bank employees tend to get very conservative with their investments at this time of year because many financial companies end their fiscal year’s before December 31st. What those employees do is sell their winners and buy beaten up value stocks. It happens every year, but the effect might be bigger this year because tech stocks have gained so much. On the macro front, one big thing helping value stocks is that the COVID vaccine has given hope to “normal” economy companies. Those stocks have done very poorly this year, so are squarely in the “value” category.

FINSUM: If a vaccine is widely available soon—and people actually take it—a return to some version of the pre-COVID economy is seems likely. That said, things will have changed and there will be some stocks that continue to struggle. Choose wisely.

(Washington)

The stock market is going to enter a new era as Joe Biden—in all likelihood—becomes president. As that happens, investors need to start thinking about how to align their portfolios. While all industries will likely be affected to some extent, there are a handful that might be impacted the most acutely, such as energy, autos, tech, manufacturing, agriculture, banking, pharma and healthcare. In autos, Biden’s push for more efficiency will likely benefit Tesla and GM, both of whom are looking to sell more electric vehicles. Tech looks like a real risk area as the chances for more data/anti-trust regulation look higher, though those could be somewhat mitigated by a red Senate. On the manufacturing front, Biden is expected to use government stimulus to boost domestic manufacturing, In banking, executives are bracing for more regulation, but changes are not expected at a fast pace, so nothing too shocking seems likely in the near-term. Pharma looks vulnerable as Biden is committed to bringing drug prices down; that said even Pharma companies don’t expect that Democratic policies will hurt their margins worse than Trump’s proposals. In insurance and healthcare, the picture is mixed. Insurers would almost certainly be challenged by increasing amounts of government coverage, but hospitals would likely benefit from providing care for millions of newly insured Americans.

FINSUM: Biden and the Democrats’ plans will reverberate through the market in the coming months, though not as much as they might if the Left grabs control of the Senate in January. Generally, we agree with that a divided government would be most beneficial to markets.

(New York)

The market has been extremely volatile this year and that has put many investors on edge, especially those nearing retirement who need to rely on their portfolios for regular income. Treasury yields have gotten so low that they are not a good source of yield. So where to turn? One option is fixed annuities, also called multi-year guaranteed annuities. In contrast to fixed-index annuities or equity-index annuities, the return on MYGAs is not tied to an index. Such MYGAs are currently offering spreads of as much as 300 bp over Treasuries, representing a strong opportunity for those who need guaranteed income.

FINSUM: Two things to bear in mind when considering these—they are generally quite illiquid as the money is “locked up”, and secondly, they do have default risk but often can have limited losses because of state guaranty associations.