Displaying items by tag: Blackrock
During a recent briefing, Blackstone's private wealth management solutions group explained that private equity and other alternatives have been well suited to perform during volatile times when traditional stocks and bonds have fallen. This has been certainly true this year as equities, government bonds, and most corporate debt have fallen as inflation and interest rates rise and recessionary concerns persist. Private markets and hedge fund strategies, on the other hand, have fared much better. However, the firm also believes that affluent investors are still under-allocated in alternative investments. According to the firm, affluent private investors typically only allocate about 5% to alternative investments. Joan Solotar, Global Head of Private Wealth Solutions at Blackstone told journalists at a briefing in London that “Investors remain under-allocated. Many advisors have found that if they hadn’t allocated to alternatives, then they underperformed. Some advisors, such as those working for decades without ever having broached the alternatives space, might lack the confidence to take the plunge.” Her colleague, Rashmi Madan, Head of EMEA for Private Wealth Solutions said the reason for this is due to a combination of burdensome administrative tasks and the difficulties investors have had accessing drawdown funds.
Finsum:Blackstone stated during a recent briefing that alternatives perform well in volatile markets when traditional securities falter, but affluent investors are still under-allocated.
With apparent eroding client interest, ESGs might be losing some of their bang, according to thinkadvisor.com. In the past several months, 31% of advisors reported taking questions about ESG or socially responsible investing from clients. That’s down from 39% who indicated as much last year and in 2020.
Thirty four percent of advisors were found to tap or recommend these strategies to clients this year, according to the survey. While that’s an uptick of 2 percentage points from 2021, it receded from a high of 38% in 2020.
Investmentnews.com reported in June that, in recent years, while a burgeoning percentage of financial advisors folded ESG investments options into their business, more now indicated they intend shore back on suggesting such investments, according to a survey.
While financial advisor use or recommendation of environmental, social and governance or ESG investing strategies have moved consistently along over the past four years, according to prnewswire.com. However, during the next 12 months, it could slip in use, according to the 2022 Trends in Investing Survey, conducted by the Journal of Financial Planning and the Financial Planning Association, as provided to prnewswire.com by the Financial Planning Association.
It would be an understatement to say BlackRock has been a leader in ESG the last couple of years but the tides could be turning. There have been massive outflows from ESG in the month of May which has been unusual given the asset classes' widespread popularity where they topped $3.5 billion. BlackRock has been the main source of outflows from IShares ESG Aware MSCI EM and other popular funds. BlackRock has cut two of iShares most popular funds from seven of their ten models. This is potentially a huge blow, as it could signal the firms changing stance in ESG or it could just be smoke and mirror as asset allocations normally change. ESGs inclusion in many model portfolios has been key to its growing popularity.
Finsum: Are ESG investors really so skittish with the tightening in the economy; the long-term prospects for ESG still seem overwhelming.
Some seasoned stock market investors may be calling to buy the dip, but BlackRock just isn’t there yet. The world’s largest asset manager says that valuations just aren’t there yet and assume that in combination with the Fed tightening cycle and thin profit margins there is too much risk. The confluence of factors among inflation, Ukraine-Russia War, and Fed tightening have sent volatility shockwaves through bond and equity markets in the last couple of months. There are other investors who see it the same way as BlackRock, and want a much more prominent spike in the VIX in order to prompt a buy back. The bearishness isn’t completely pervasive as analysts on average are expecting profits to grow by over 10% across the S&P this year.
Finsum: The Euro area could already be in a recession in large part due to the war, which could drive more value in US assets or trigger a recession stateside.
BlackRock's active management has long been the forgotten investment in the firm's giant ETF basket they manage, but things are starting to turn. While the index business hit $10 trillion in the last quarter it was the active funds dring the fee growth in fact in the last quarter of 2021 they were responsible for 60% of the fee growth. The firm has poured lots of resources into their active funds and their active fixed-income has been a huge winner. The firm seems more willing now than ever to place itself as a big active manager where they have always been synonymous with passive investing. BlackRock credits its growth to its own internal push in active management but there has been a huge industry-wide surge in active funds.
FINSUM: Active equity still lags behind for lots of reasons, so its probably best to stick to direct indexing or ETFs in equity markets.