Displaying items by tag: investors

According to findings from Janus Henderson Investors’ 2022 Retirement Confidence Report, self-directed investors appear to be tightening their budgets amid rising inflation and market volatility. The report found that 86% of survey respondents are concerned or very concerned about inflation and 79% are concerned or very concerned about the stock market. However, despite these concerns, only 13% of investors have moved money out of stocks or bonds and into cash. Instead, almost half of the respondents said they have reduced their spending or plan to reduce spending as a result of the financial markets and rising inflation. The report also noted that women reported greater concern about the stock market than men, but no gender-based difference was found regarding inflation. Another noteworthy finding from the report was that investors still in the workforce were more worried about the stock market and inflation compared to retirees. This can be attributed to the many uncertainties associated with how their household budgets could change in retirement.

Finsum:A recent report found that investors are tightening their budgets, but not moving to cash amid the current rising inflation and market volatility.

Over the past year, direct indexing has become a hot topic in the financial media. It’s hard not to see why with firms such as Fidelity and Vanguard launching direct indexing solutions. But direct indexing is not a new investment product. In fact, Natixis launched Active Index Advisors Strategies, its direct indexing business, in November 2002 with the AIA S&P 500® direct indexing strategy. The strategy has grown from $4 million in assets under management to nearly $8 billion today. Even more impressive is that the AIA S&P 500® strategy has tracked its benchmark index to within 12 basis points annualized since inception, outperforming on an after-tax basis by over 370 basis points on an average annualized basis. The strategy seeks to outperform on an after-tax basis while providing a pre-tax return similar to the S&P 500 Index. The firm’s direct indexing solutions provide fully customizable SMAs that can be customized for tax purposes, align with investor values such as ESG, or tilt towards factors.

Finsum:Amid a recent push by financial firms to launch their own direct indexing solutions, Natixis celebrates the 20th anniversary of its first direct indexing strategy. 

Want to mix with the big boys, eh? Well, you can partake in an approach to investing that, previously, institutional or ultra-high-net-worth investors alone had access to, according to Kiplinger.com.

Today, more investment firms offer “personalized” or “direct” indexing to Main Street investors. Typically, the trend, controversial though it might be, compels buying and trading stocks directly – a mirror image of an index. With cost conscious index investors squarely on their radar,  smart supercomputer programs and the ability to buy fractions of shares, at least three firms—Fidelity, Schwab and Wealthfront—are repackaging the service, a climate aided by no commission trading.

Meantime, earlier this month, as part of an industry trend, Morningstar became the latest company to launch a direct indexing investment offering, according to thinkadvisor.com.

And in the landscape of firsts, Morningstar Direct Indexing’s has its mojo; it’s one of Morningstar Wealth’s maiden major product launches. The indicated that, to begin with, direct indexing portfolios will be available the Morningstar Wealth Platform.

“Advisors are looking for ways to meet client interest in new investment options, particularly those that allow customization and personalization,” Daniel Needham, Morningstar Wealth president, said in a statement.

According to Richard Best, Head of the Division of Exams at the Securities and Exchange Commission, Regulation Best Interest and the Advisers Act fiduciary duty remains a top priority for 2023 exams. While speaking at the SEC’s National Compliance Seminar, Best said that standards of conduct such as Reg BI and the fiduciary duty “remain top of mind for us.” Best told compliance officers that the Division of Exams is “focused on how broker-dealers and advisors satisfy their obligations under Reg BI and the Advisers Act fiduciary standard to act in the best interest of retail investors and not to place their own interests ahead of retail investors interest.” The exam division publishes an annual priorities letter each year, with the 2023 priorities expected to be issued early next year. The three areas of focus will be ESG-focused investing, private funds, and standards of conduct. For ESG, the SEC will look into whether advisors are accurately disclosing their ESG investing approaches and have implemented policies to prevent violations of federal securities laws.

Finsum:With exam priorities expected to be issued early next year, the SEC has made Regulation Best Interest and the Advisers Act fiduciary duty a top priority for 2023 exams.

According to a new research survey by Stanford University, investor support for ESG and their willingness to potentially lose money on ESG causes varied by age, wealth, and specific ESG issues. The survey found that investors 58 years old and over were the least likely to support ESG objectives in general, while investors between the ages of 18 and 41 were the most likely to put their savings at risk to support various ESG initiatives. More than one-third of younger investors said they would be willing to lose 11% to 15% of their retirement if that meant encouraging companies to have gender and racial diversity mirroring the general population. Only 3% of the older investors said they would forfeit the same amount for those goals. Two-thirds of older investors said they were unwilling to lose any money to support diversity. Stanford also found that wealthier young investors were the biggest ESG champions. Young investors with at least $250,000 would be willing to lose about 14% of their retirement savings, while young investors with savings less than $50,000 said they would only be willing to lose 6%. In terms of specific ESG issues, the survey found that investors cared more about environmental issues than social issues and governance.

Finsum:A recent ESG survey conducted by Stanford found that wealthy younger investors are more willing to potentially lose money on ESG initiatives than older or less wealthy individuals.