2021 was an all-time year for active fixed income launches, and 2022 is looking to continue that pace. Capital Group just debuted another active fixed income ETF to capitalize on this financial trend. The Capital Group Core Plus Income ETF (CGCP) will seek a higher income return for a traditional bond fund and really seek to maximize total return. With a wide swath of debt available in their targets, they can invest over a third in below investment grade securities. This launch comes amid 5 other active equity fund launches for Capital Group. Overall investors are looking for more alpha return in their portfolios and are looking to active management to find it.

Finsum: Macro factors are pushing more investors into active bond funds, with increased interest and inflation risk core analysis is more effective than ever in fixed income.

Financial markets are extremely volatile as of late and that's putting it lightly, but REITs might be perfectly insulated at this moment and a great option. One of the largest sources of volatility is Russia and Ukraine but real estate is a local business and a solid option for those looking to alternatives. Another source of market risk is inflation however, real estate generally benefits from inflation. House prices outpace it and fixed-rate financing means debtors pay back less over time. Real estate also has leased on a long-term basis and insulted to most short-term shocks, and is a safe haven from typical equity volatility. Finally, if more turmoil suppresses interest rates then this will increase demand for real estate moving forward.

Finsum: We see the huge outperformance potential for real estate because of how uncorrelated the rate of return is with the rest of the markets right now.

Goldman Sachs swiftly raised its one-month projection for Brent to $115 a barrel, a $20 price increase from their previous projection. Not only that they say there are still lots of upside risks if there is further disruption or escalation. The only thing that could hold higher oil prices off would be a complete deterioration of demand by the US and Western Europe. More sanctions are upcoming from the west as Russian banks will be banned from SWIFT payment systems. Commodities are also facing higher price pressures with both threats to payment methods for Russian goods and restrictions to Russian commodities to the wider West. On top of all of this shale supply will fail to compensate for the current demand and OPEC+ will have to step in if there is to be any relief in oil prices.

Finsum: This is a good time to by energy bonds as payment streams will surely be in supply with higher gas prices.

Investors, advisors included, seem to be wondering why the stock market has done quite well since Thursday morning when Russia invaded Ukraine. Many expected stocks to tumble—and they initially did—but the opposite has happened, with the S&P 500 up around 5% since the close of business on the 23rd. The reason why has everything to do with the Fed and interest rates. The market now thinks the Fed is in a bind and won’t be able to hike rates as fast as they would have been able to before the conflict. This would mean a slower stop of the easy money surge that has gone on for years. Markets are now only forecasting a 12.5% chance of a 50 bp hike in March.

FINSUM: Stocks have jumped as a simple reaction to the fact that the path of rate hikes looks less steep right now than it did a week ago, which is also why the tech-heavy Nasdaq has jumped the most.

Fidelity has just taken a big step in the direct indexing game. Direct indexing has been very hot across the asset management space over the last 12-18 months and has mostly been marketed so far as a high-minimum service for advisors to customize portfolios to client desires. Now, with a product called FidFolios, Fidelity is poised to launch a service to let mom and pop investors customize their portfolios with a minimum of just $5,000.

FINSUM: This was bound to happen. Most advisors may see this as a threat to their value proposition, but we more see it as a validation of the utility of direct indexing for clients. Advisors should take this as a sign of confidence that they should offer direct indexing to clients!