Displaying items by tag: risk

A new study from Escalent details model portfolio use and acceleration since the pandemic. There has been a slow number of model portfolio adoption from third party issuers since the pandemic but those already using third party MP have had a significant uptick with over a fourth of them have seen an increase in use. However, advisors that lean on in-house production have mainly kept it that way which is a little over half of the users. Overall third-party adoption is still on the rise, and that's despite advisors' apprehension of MPs when compared to standard active management during high volatility.

Finsum: Model portfolios seem to be simplifying the advisor decision-making process, regardless of whether they are in-house or third party.

Many investors have become accustomed to the rising equity prices that have been pumped up by an ultra-low rate environment and are overexposed to too much risk, at least that's the opinion of 4/5ths of investment professionals surveyed by Natixis Investment managers. Over 3/4rs of professionals surveyed said that inflation and interest rates were the biggest risks to portfolios moving forward. The way out of that risk exposure is to have more active management which can thrive when the risks are apparent. The other solution is model portfolios which have been built to target specific risks like inflation or interest rate risk. Finally, advisors are being begged to add crypto to portfolios in a high weight, and are unsure of how this fits into portfolios.

Finsum: Regular volatility or supply-side shocks are almost impossible to predict, but when the risks are very apparent investors should take the necessary precautions.

hroughout 2021 one of the biggest worries for investors, business owners, and policy makers has been the return of inflation. Long dormant, inflation has surged as markets and economies recover from the COVID-19 pandemic ... [Read More]

We currently find ourselves in an unusual situation, as far as the economy and the financial markets. Due to the coronavirus pandemic, the Federal Government and Federal Reserve introduced massive fiscal and monetary stimulus programs ... [Read More]

Over 500 institutional investors were surveyed and one of the top 5 most important themes going into 2022 is active management in areas like fixed income markets. A combination of factors are leading to more investment but broadly speaking, it is uncertainty which is having investors leaning into active management. On top of this, active management is preferred as the best strategy in risk management overall. A majority of those surveyed believe high fluctuation in inflows and outflows to passive funds put the market in a more systemically risky position. Despite a dragging start to 2021, 70% of investors said their active funds outperformed passive ones.

FINSUM: Picking stocks is always hard, but increased volatility could give pickers an edge.