Wealth Management
NDVR, a Wealth Optimization firm, recently unveiled NDVR Unified Equity, an actively managed personalized indexing strategy. NDVR, which was created by a team of Quant Ph. D.s and technology innovators, offers a proprietary investing platform for high net worth investors that features personalized direct indexing and active factors such as Extended Market, Low Volatility, Momentum, Quality and Value, tax-loss harvesting, and Socially Responsible Investing. The Unified Equity strategy will target traditional alpha, tax alpha, and fee alpha through direct ownership of U.S. equities and is designed to deliver more aligned portfolios with greater efficiency than index funds and separately managed accounts. The strategy starts with a universe of 1,500 large-, mid-, and liquid small-cap stocks traded on U.S. markets. Investors can then create a portfolio using goals, requirements, and investing preferences in the NDVR Portfolio Lab. The NDVR Optimization Engine analyzes that plan and builds a custom portfolio that is optimized to deliver the growth and secured spending that was targeted by the investor.
Finsum: As direct indexing continues to proliferate, wealth optimization firm NDVR unveiled an active personalized direct indexing strategy that high net worth investors can customize through their platform
Two bills currently in Congress could expand a deferred annuity known as the Qualified Longevity Annuity Contract (QLAC). Both the House and Senate are working on retirement savings legislation that would increase the allowable size of QLACs, making them more attractive to middle-income retirees. QLACs work like any fixed annuity. They pay a steady monthly income, but payments are deferred until the holder is at least 75 years of age. This means that you can buy a QLAC for a lower initial investment than immediate annuities. However, you can invest no more than $135,000 or 25% of your total retirement account balance over your lifetime. A Senate bill called the Enhancing American Retirement Now (EARN) Act, would raise the maximum investment to $200,000 and eliminate the 25 percent threshold, while a House bill, called the Securing a Strong Retirement Act, or SECURE 2.0, would repeal the 25 percent limit. The Senate bill has bipartisan support and the House bill passed last Spring. It appears Congress is looking to build a market for these products by raising the cap on maximum investments.
Finsum: Both houses of Congress are working on legislation that would increase the appeal of a deferred annuity called the Qualified Longevity Annuity Contract.
Wealth managers, unite!
Or some such thing.
A wider swath of them is jumping into alternative – and often less liquid, assets, according to investmentnews.com. The strategy’s come at the cost of traditional asset classes, from which they’ve retreated.
Investors in or approaching retirement are eyeing alternatives in light of the one two punch of a volatile stock market and steepling inflation.
Among wealth managers globally, inflation is their top headache, according to a recently released Mercer survey. In the upcoming two years, investment returns were expected to be lower than they’ve experienced in recent years among nearly half of the respondents.
“It is encouraging to see the majority of wealth managers embracing and investing in illiquid and other alternative asset classes, citing yield and return potential. With traditional asset classes unlikely to generate the same level of returns in the next few years as they did in the past, it is critical that wealth managers’ client portfolios are positioned to seize the widest range of investment opportunities,” Gregg Sommer, partner and US financial intermediaries leader at Mercer, said in a statement.
While the stock market’s works wonders when it comes to feeding the bottom line, among some investors, alternative investments could be an ideal fit the portfolio as well, according to fool.com.
Some of the most popular type to consider:
- Real estate
- Crowdfunding
- Peer-to-peer lending
- Commodities
- Hedge fund investing
- Cryptocurrency
- Art
More...
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.
The resounding takeaway from a recent FINRA conference call is that the regulatory body is taking a “no one-size-fits-all” approach to Reg BI compliance. FINRA explained that it is moving away from good faith efforts reviews and into “deeper dives” on how firms comply with Form CRS and the Reg. BI Care, Compliance, Disclosure, and Conflicts of Interest obligations. The conference call focused on FINRA’s expectations during exams and the types of violations that its exam teams will refer to their enforcement colleagues. FINRA mentioned several common violations that it will refer to its Department of Enforcement, including the failure to recognize the applicability of Reg BI and Form CRS deficiencies related to incorrectly answering the disciplinary history question. It also indicated that firms that were previously cited for Reg BI CRS deficiencies, and made no efforts to correct findings, are more likely to be referred to Enforcement. The overall message for firms is that they should document the steps they have taken to further Reg. BI and Form CRS compliance. This could be the difference between an exam deficiency or an enforcement action.
Finsum: In a recent conference call, FINRA’s explained that there is no one size fits all approach to Reg BI compliance and firms shoulddocument the steps they have taken to make sure they’re compliant.
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.