Exchange traded funds are the bomb as they play an "expanded role in portfolio construction," according to a recently released report by State Global Markets, the survey sponsor, reported pionlne.com.

Participating in the survey were 700 global institutional investors responsible for asset allocation decisions at pension funds, wealth managers, asset managers, endowments, foundations and sovereign wealth funds.

In fixed income, the outlook -- short term – is dominated by unrelenting inflation and upticks in central bank interest rates, according to ssga.com At the same time, however, investor implementation and fixed income allocations management are influenced by longer term, structural forces.   

And talk about a financial trend to swoon for. In fixed income ETFs, assets under management ballooned from $574 billion in 2017 to $1.28 trillion in 2021. Over the same time period, there was a rapid acceleration of in the number of funds -- from 278 to nearly 500.

The role of ETFs in asset allocation’s expanding to non-core sectors, the 2022 survey shows, according to the site. One example: 62% of investors who are increasing exposure to high-yield corporate credit over the next 12 months say it is likely they will use ETFs to do so, and 53% say the same for emerging-market debt.

Based on research released Monday, Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, believes that small-cap stocks have already priced in a recession and are currently de-risked. Calvasina noted that small-cap performance has been stable since January and is in a narrow trading range in comparison to large-caps. She stated, “While this doesn’t necessarily tell us that a bottom in the broader U.S. equity market is imminent, it does tell us that the equity market is behaving rationally. It has been our view for quite some time that small-caps, which underperformed large-cap dramatically in 2021, have already been de-risked and are baking in a recession.” She also pointed out the sectors that tend to perform best in the period leading up to the final rate increase in a rate-hike cycle. These include defensive sectors such as consumer staples, energy, financials, healthcare, and utilities. Calvasina wrote the sectors “tended to perform the best within the major index in the six-, three- and one-month periods before the final hikes in the past four Fed tightening cycles.”

Finsum: In a recent research note, Head RBC equity strategist Lori Calvasina believes that stable returns of small-cap stocks are due to recessionary factors already priced in.

While direct index may be a hot industry topic, not all advisors are buying in. In fact, most clients don’t even know what direct indexing is. Based on comments from a panel of advisors and tech executives at the WealthManagement.com Industry Awards earlier this month, clients aren’t asking for direct indexing and most have never heard of the term. While financial giants such as Goldman Sachs, Fidelity, Vanguard, Pershing, Schwab, and Franklin Templeton are acquiring firms and building out direct index offerings, the strategy has not made its way into client and advisor discussions. Megan Meade, CEO of The Pacific Financial Group told WealthManagement.com, “They’re just not that sophisticated of investors. They don’t have the assets for that. Nor do they need that level of tax efficiency.” Adding to the uncertainty are tech executives who are also unsure about the current value of direct indexing. J. Helen Yang, founder and CEO of Andes Wealth Technologies told the publication, “I am very skeptical about direct indexing as a way to offer personalization.”

Finsum: A recent panel of advisors and tech executives revealed that many haven’t bought into direct indexing yet, while most clients don’t even know what it is.

Advisors, it seems, are the belles of the ball. Stepping up to their full potential, they’re drawing sweet landing spots along with equally tantalizing deals to sign on the bottom line, according to forbes.com.

But the primary force juicing the movement of advisors is, well, the advisors as they yearn for more freedom and control of how they do business with clients.

Earlier this month, the fourth annual CNBC Financial Advisor 100 was announced by the network, according to cnbc.com. Top advisory firms – which provides clients with a big boost addressing their financial welfare – are recognized by the ranked list.

Some investors have a plan to help deal with these turbulent times when the need for financial guidance is paramount; others don’t and are compelled to closely evaluate their finances and take the reins in order to withstand a topsy turvy environment. Taking on a financial advisor is a way of doing that.

The top 10 2022 CNBC FA 100:

1.         Woodley Farra Manion
2.         Dana Investment Advisors
3.         Albion Financial Group
4.         Heritage Investment Group
5.         Edgemoor Investment Advisors
6.         Salem Investment Counselors

7.         Leavell Investment Management
8.         Halbert Hargrove Global Advisors
9.         The Burney Company
10.       Lee, Danner & Bass

Is this tune, some might ask, on auto pilot?

Market conditions, particularly given the atypical transition from one week, month and quarter into a new period on each scale, are rife with uncertainty, according to dailyfx.com.

Contributing to the volatility, of course, is a trio of factors: the perpetually changing backdrop surrounding investor sentiment and economic forecast, not to mention where things are down the road.

Meantime, probably not surprisingly, fanned by burgeoning inflation and interest rates, which are cultivating qualms about a potential recession, clients are airing out their trepidations with their financial advisors, according to cnbc.com.

As for further hikes? Buckle up, especially since, in the name of warding off inflation, the Fed ratcheted interest rates by 0.75% basis points in September – for the third straight time, to boot.

The predominant concern for clients given the economic environment: “What the labor environment is going to look like and what their risk is as far as unemployment goes,” said certified financial planner Douglas Boneparth, president of Bone Fide Wealth in New York. Their clients are largely between ages 28 and 42.

“At this point it’s speculation,” Boneparth said. “It’s hard to point to data that says we need to be concerned right now.”