Displaying items by tag: model portfolios

JPMorgan’s Chief Market Strategist Marko Kolanovic is trimming risk exposure in the bank’s model portfolio due to uncertainty in central-bank policy and a rise in geopolitical tensions. It’s a notable move for one of the most bullish strategists this year. Kolanovic cut the size of the company’s equity-overweight allocations and bond-underweight allocations. Equity overweight is the expectation for stocks to outperform their peers, while bond underweight is the outlook for bonds to underperform their peers. In a research note on Monday, Kolanovic’s team wrote, “Recent developments on these fronts — namely, the increasingly hawkish rhetoric from central banks, and escalation of the war in Ukraine — are likely to delay the economic and market recovery.” This follows Kolanovic’s comment earlier this month that the company’s year-end S&P 500 target of 4,800 may not be realized. However, he is hoping that bearish sentiment could limit further declines, while Asian economic growth could help support a global recovery.

Finsum: Uncertainty in the Fed’s central-bank policy and a rise in geopolitical tensions led JPMorgan’s Chief Market Strategist to trim risk in the firm’s model portfolio.

eToro, an Israeli social investor network, recently announced the launch of ESG-Leaders, a portfolio that offers retail investors long-term exposure to companies leading the way in ESG best practices. The portfolio is created by identifying companies with some of the highest ESG scores in their sectors. The portfolio will also take into consideration factors such as market capitalization, liquidity, and sell-side analyst ratings. The 11 sectors covered include consumer discretionary, consumer staples, energy, financials, healthcare, industrials, information technology, materials, real estate, telecommunication services, and utilities. Some names currently in the portfolio are Colgate-Palmolive, NVIDIA, Costco, and Union Pacific. The initial investment for the portfolio starts at $500. The portfolio launch follows the introduction of ESG scores for over 2,700 stocks on eToro's platform. ESG scores, which are powered by ESG Book, combine up-to-date market news, NGO signals, and company-reported information that enable users to consider ESG factors when creating portfolios. Investors can keep track of stock developments on eToro’s social feed.

Finsum: Following the launch of ESG scores on the eToro platform, investors can now access an ESG -Leader’s portfolio of stocks with the highest scores.

According to a new report from Cerulli Associates, more advisors will be adopting the use of model portfolios to better serve their clients and free up time to develop their businesses. In the latest Cerulli Edge—U.S. Advisor Edition, 4Q 2022 Issue, the firm noted that the industry’s steady transition toward a financial planning-oriented service model will be a major fact in the increased adoption of model portfolios. Cerulli expects advisors to increase planning offerings over the next year, with 82% of advisor clients receiving targeted or comprehensive financial planning services by 2023. The report also noted that insourcers, or those who either customize portfolios on a client-by-client basis or use practice-level resources to build a series of custom models, spend 18.5% (practice models) and 29.5% (customizer) of their time focused on investment management. If those advisors use model portfolios, it will allow them to reduce their time commitment to less than 10%. The report also notes that advisors that outsource their portfolio construction have clients, on average, that are roughly half the size of those that insource their portfolio construction. Cerulli also found a correlation between model users and younger and smaller advisory practices.

Finsum: A recent Cerulli report predicts an increase in demand for model portfolio outsourcing as the industry transitions to a financial planning service model.

Model portfolios? They’re making their presence felt.

Their use by advisors is one of the most significant factors now reshaping the financial product distribution terrain, according to broadridge.com.

Gaining a firm handle not only how – but why – advisors are leveraging the model portfolios yields insight into the idyllic sales approach required to lasso model driven fund and ETF assets. What’s more, its effect on the distribution strategies and subsequent profitability generated by asset managers talks with a big stick.

Within the $6.5 trillion investment advisory solutions industry, these types of models perpetually have played a key role, according to MMI.

Working from scratch, advisors can build each client portfolio in their book of business.  Not only that, using a more standardized approach, advisors, by tapping into broker/deal programs like rep-as-portfolio, can take their own models and run with them.

It doesn’t stop there. Advisors -- particularly IBDs and RIAs – have the leeway to hang onto discretion and executive models through emerging model marketplaces. 

The reason for their popularity are apparent, according to troweprice.com. Not only can they abet your ability to streamline your business, you also can pare risk. Another key attribute: they avail you the opportunity to devote more time to clients.

However, performance can vary wildly depending on the model, which can make discovering the idea fit you’re your client less than easy pickings.  

Stash…Away we go?

It’s a great way to travel, apparently.

In order to offer a suite of diversified multi asset model portfolios, StashAway, Southeast Asia’s wealth management company, recently joined forces with Blackrock, the largest asset manager in the world, according to crowdfundinsider.com.

The portfolios were forged by Blackrock’s analytics and ETFs. StashAway will be their manager.

General Investing portfolios – through the StashAway app – abets the ability of investors to access diversified, multi asset ETF portfolios. The portfolios are optimized for risk adjusted returns over the long haul. Like a regular smorgasbord, investors have a choice of three different General Investment strategies.   

The StashAway supported General Investing portfolios dial in on a dual role: optimizing for long term risk adjusted returns while ensuring the risks are unrelenting. While doing the same, the Responsible Investing portfolio also optimizes for the effect of ESG.

And limited thinking? Ha; not around here. The third General Investing strategy, which is supported by BlackRock, is a new long term investment strategy. Its objective is handing the investor broader diversification.

“We’re excited StashAway’s launching portfolios powered by BlackRock’s analysis,” said Peter Loehnert, BlackRock head of ETFs and Index Investing APAC, according to hubbis.com. The partnership, he continued, will give more investors across Asia access to BlackRock’s insights and investment capabilities via StashAway’s platform. It will offer diversified and liquid ETFs as building blocks for portfolio construction, maximising the value of ETF investing.