Wealth Management
Bitcoin surged past $107,000, hitting an all-time high following President-elect Donald Trump's pledge to create a U.S. bitcoin strategic reserve, mirroring the oil reserve system. This announcement, combined with the inclusion of Bitcoin-focused company MicroStrategy in the Nasdaq 100, fueled market optimism.
Bitcoin rose over 50% since the November U.S. election, while Ethereum also saw gains. Trump, who has shifted to a pro-crypto stance, hinted at plans to establish the U.S. as a global crypto leader, naming crypto-friendly officials to key regulatory positions.
Despite enthusiasm, analysts caution that implementing a bitcoin reserve could face significant delays and complexities.
Finsum: Bitcoin's value has soared over 150% this year, reflecting increasing investor confidence in its regulatory and market potential.
Bahl & Gaynor recently launched two new dividend-focused ETFs, the Bahl & Gaynor Dividend ETF (BGDV) and the Bahl & Gaynor Small Cap Dividend ETF (SCDV). Both funds aim to provide long-term dividend income and downside protection by investing in high-quality, dividend-paying equities.
BGDV focuses on large-cap stocks with a 0.45% expense ratio, while SCDV targets small caps with a 0.70% expense ratio. These funds use a bottom-up stock selection strategy, emphasizing factors like historical performance, competitive advantages, and future cash flow potential.
Sector exposure is not a primary focus but may tilt toward health care, financials, and industrials for SCDV and financials, industrials, and information technology for BGDV.
Finsum: The bond market could have a tumultuous Q1 and income investors might want to look elsewhere for returns.
Family offices are increasingly pivoting away from traditional investments and embracing alternative assets such as private equity, real estate, and venture capital. According to J.P. Morgan’s Global Family Office Report, nearly half of family office portfolios are now in private markets, reflecting their long-term horizons and ability to capitalize on illiquidity premiums.
This shift allows for higher potential returns and smoother valuation changes compared to the volatility of public stocks. Many family offices also leverage their entrepreneurial roots for direct investments, contributing expertise and networks to private companies.
Beyond diversification, these offices adopt goal-based strategies tailored to multigenerational needs, ensuring alignment with unique family objectives.
Finsum: As they navigate evolving trends like generative AI and private market rebalancing, family offices continue to balance innovation with prudent risk management.
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Advisors remain divided on the adoption of direct indexing, despite its increasing popularity and benefits like tax efficiency and portfolio customization. A recent survey revealed that while 34% of respondents currently use or plan to use direct indexing, 39% have no plans to adopt it, and 28% are open to considering it in the future.
Experts view the 62% engagement or consideration rate as promising but notes barriers such as high account minimums and misunderstandings about the strategy. Advocates highlight its advantages, including tax loss harvesting, personalized portfolios aligned with client values, and competitive performance compared to traditional ETFs.
However, misconceptions persist, particularly around how capital loss generation works without sacrificing returns.
Finsum: Advisors should start exposing themselves to direct indexing because we will see costs decrease and the tool become more standard over the decade.
Vanguard has produced two new actively managed municipal bond ETFs aimed at offering competitive tax-exempt income opportunities: the Vanguard Core Tax-Exempt Bond ETF and the Vanguard Short Duration Tax-Exempt Bond ETF.
These funds target investors looking for diversified municipal bond exposure across credit qualities and regions, with the potential to exceed benchmark performance. Managed by experienced professionals, the Core ETF focuses on high-quality, longer-term bonds, while the Short Duration ETF emphasizes shorter-term bonds with minimal interest rate sensitivity.
Both funds come with low expense ratios, setting them apart from similar offerings in the market. These launches expand Vanguard's active fixed-income lineup and complement its existing suite of index-based municipal bond funds.
Finsum: With a proven track record in bond fund management, these Vanguard options might work for investors looking to invest in munis.
Capitol Meridian Partners, a defense investment firm established by former Carlyle Group executives, is ramping up efforts to capitalize on private equity's increasing influence in advancing U.S. defense technologies.
The firm recently brought on Michael Puopolo, with experience at Blackstone and Carlyle’s aerospace and defense team, as managing director, alongside Curtis Uehlein, a former leader of multiple Carlyle-backed companies, as an operating executive.
Having raised over $1 billion in its debut fundraising effort this year, Capitol Meridian is directing funds toward aerospace, defense, and government technology sectors. Notable projects include Parry Labs, which develops drone operating systems, and LMI, which supports the Department of Defense in transforming extensive data resources into actionable insights.
Finsum: There is probably little doubt that a new administration will be more favourable to this type of private equity investments.