A noteworthy development in 2024 has been soaring uranium prices. The radioactive metal was up more than 90% in 2023 and is now at its highest levels since 2007. According to Ole Hansen, the head of commodity strategy at Saxo Bank, this move is being driven by increased demand from ETFs holding physical inventory and utilities who were not hedging due to years of low prices. 

Prices moved past $100 per pound last week following an announcement from Kazakhstan's state uranium company that it may fail to meet production goals due to construction delays and difficulty sourcing raw materials. This follows a slew of production downgrades from a variety of producers in 2023, adding to pressure on the supply side. 

On the demand side, analysts point to the Sprott Physical Uranium Trust and Yellow Cake as marginal sources of gold demand, contributing to the ‘squeeze’. As a result, many now expect uranium to exceed all-time highs from June 2007 of $136 per pound, and uranium miner equities have also been following the metal higher. 

Longer-term, many believe that the uranium market is at a deficit given the gap between yearly production and consumption. Currently, the gap has been made up by huge amounts of secondary supply, yet this inventory is also rapidly being depleted.  

Finsum: Uranium prices have continued momentum from last year. Many believe new, all-time highs are in store given increased demand from ETFs and utilities, while production is impaired.

Aeon conducted a survey of pension funds, insurance asset managers, family offices, and wealth managers. Among the findings was that a majority plan to increase their allocation to active fixed income funds over the next 2 years. Currently, about 17% of respondents have less than 10% of their portfolios in active fixed income strategies, while 20% have between 50 and 75% of their portfolio in active fixed income. Overall, respondents are willing to trade liquidity for greater returns and diversification. 

The survey also indicates that 13% of respondents plan to ‘dramatically’ increase exposure, while 81% plan to do so ‘slightly’. In terms of return expectations, 55% are looking for between 3 and 5%, while 36% are looking for between 5 and 7%. 

In terms of alternatives, there was nearly unanimous consensus that the asset class would continue to grow as 74% see a slight increase over the next 2 years, while 16% see a dramatic increase. 

Another area of agreement is that these allocators are looking for fund managers with a ‘broad mandate’ to invest in several credit markets. The respondents also shared the view that they would be increasing allocation to private credit with 24% looking to ‘dramatically’ increase, and 67% seeing a slight increase. 

Finsum: Aeon conducted a survey of institutional investors. Among the findings was a consensus agreement that allocations to active fixed income strategies would materially increase over the next 2 years. 

Taking a look back at the previous year can reveal some interesting lessons for fixed income investors. Overall, fixed income finished the year in the green as inflation finally started to ease. This led the Federal Reserve to pause interest rate hikes, and expectations are for it to start cutting rates sometime next year, resulting in the Bloomberg Aggregate US Bond ETF finishing up 5.5% last year. 

However, there was considerable variance in performance across the curve and within different sectors. The best-performing segment was CCC-rated corporate debt which finished the year up 20.1%. 

While the combination of low defaults and falling interest rates is a bullish combination for high-yield debt, this variance in performance also highlights the importance of selection. To this end, BondBloxx offers fixed income ETFs that target specific sectors and credit ratings. 

The BondBloxx CCC-Rated USD High Yield Corporate Bond ETF offers exposure to CCC-rated corporate debt. The firm also offers high-yield fixed income ETFs that provide exposure to specific sectors such as consumer cyclicals, or telecom, media & technology. In total, BondBloxx has 20 different ETFs with a cumulative total of $2.5 billion in assets. It’s known for its innovation in providing more targeted investment vehicles. 

Finsum: 2023 saw fixed income performance that was in-line with historical averages. However, there was considerable dispersion within the asset class. For instance, CCC-rated corporate debt finished the year up more than 20%. 

Hazelview Investments shared its bullish outlook for real estate investment trusts (REITs) in 2024. The firm sees gains in the fourth quarter of last year continuing due to earnings strength and relatively low amounts of real estate supply which should support prices. It also sees upside due to attractive valuations, 

It does see the economy slowing in the coming year but this should be offset by easing interest rates and the sector’s strong, underlying fundamentals. In addition, Hazelview points out that historically REITs have delivered their strongest performance during the interim period in between the Fed changing course on monetary policy from hikes to cuts. 

According to Corrado Russo, managing partner and head of Global Securities at Hazelview Investments, "The shifting tides of economic and monetary conditions, coupled with compelling valuations, create a canvas for strong performance in the REIT market in 2024." 

In terms of earnings, the firm sees a 10% increase next year on a cumulative basis. It also anticipates a decline in available supply given that construction has slowed to a crawl over the last 2 years given higher construction and financing costs. At the same time, demand has seen little indication of slowing. 

Finsum: Hazelview Investments is bullish on REITs for 2024 due to attractive valuations, strong underlying fundamentals, double-digit earnings growth, and improving monetary and economic conditions.

According to a new research report from Cerulli Associates, financial advisors are retiring at a pace, faster than they can be replaced. The firm estimates that 109,000 financial advisors in the US will retire over the next decade. This is about 38% of all advisors in the US, representing about 42% of total assets. Overall, the industry needs to do a better job of investing in training programs and giving younger advisors more opportunities in client-facing and asset-gathering roles.

The report highlighted another trend as older, established advisors will continue to move into RIAs given more control and the ability to sell their practice. Currently, advisors over the age of 55, manage 56.7% of total assets, despite accounting for 42% of advisors. 

RIAs and independent broker-dealers saw headcount growth of 856 and 685, respectively, in the first 9 months of 2023. In contrast, wirehouses lost 612 advisors. This has been the case since 2008, and Cerulli forecasts that the share of advisors at wirehouses will go from 15.1% to 13.4% over the next 5 years.  

In contrast, RIAs are where growth is happening as most broker-dealers now offer some sort of RIA platform to entice recruits. There has also been consolidation, driven by private equity, with a total of 321 deals in 2023. 

Finsum: Cerulli issued a new report which revealed that nearly 40% of advisors will be retiring over the next decade.