Wealth Management
Bank of America is urging investors to focus on high-quality value stocks as markets show signs of overheating and sentiment shifts toward more defensive strategies. In its Small/Mid Cap Factors report, the bank noted that while small-cap value stocks lagged in the third quarter, they are now positioned for a rebound.
Analysts pointed to several signals suggesting stronger prospects for value stocks, including the U.S. Regime Indicator’s recent shift to a “Recovery” phase, historically favorable for value leadership.
The report also emphasized that value stocks tend to outperform during Federal Reserve rate-cut cycles, similar to the current environment. Bank of America highlighted that value has started to outperform in mid caps, even as growth stocks continue to rally, noting that the “low-quality rally is in its later innings.”
Finsum: Turning to fundamentals could be the play with rate cuts on the horizon and an shaky economy.
The Vanguard Information Technology ETF (VGT) offers investors broad exposure to leading artificial intelligence (AI) companies at a very low cost, with an expense ratio of just 0.09%. While not an AI-specific fund, it tracks the information technology sector, which includes many of the world’s biggest AI players such as Nvidia, Microsoft, Apple, and Broadcom.
About two-thirds of the fund is concentrated in semiconductors and software, meaning its performance is closely tied to the success of a few dominant firms. Compared with AI-focused ETFs like Global X AIQ, which charges 0.68%, VGT’s low fee structure can translate into thousands of dollars in added returns over time.
However, its heavy concentration — nearly 45% in Nvidia, Microsoft, and Apple — makes it vulnerable to downturns in those key stocks. Overall, VGT provides a simple, low-cost way for investors to benefit from the AI boom without the challenge of picking individual winners.
Finsum: AI makes up a high percentage of GDP growth and this index fund could take advantage of this growing sector.
Rapid Growth and Popularity: Interval funds are gaining momentum, with 19 new launches through May 2025, on pace to surpass the 2024 record of 27. Assets under management have grown nearly 40% annually, reaching almost $100 billion as of April 2025.
Unique Structure and Flexibility: Unlike mutual funds, interval funds allow quarterly redemptions, offering a semi-liquid structure that enables managers to invest in less-liquid, higher-return opportunities like asset-backed securities or CLO equity.
Advantage in Volatile Markets: During market dislocations, interval funds can act as opportunistic buyers rather than forced sellers, taking advantage of discounted high-quality assets when others are liquidating positions, demonstrated during the COVID-19 sell-off in early 2020.
Finsum: This structure better aligns fund liquidity with long-term investments, and advisors should track the horizon for their clients
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Public companies’ Bitcoin holdings jumped nearly 40% in Q3 2025, even as the cryptocurrency’s price stayed below $115,000. According to Bitwise, 172 firms now collectively hold about 1.02 million BTC—roughly 4.8% of total supply—driven by large additions from players like Strategy and Japan’s Metaplanet.
Despite this record accumulation, enthusiasm across crypto equities has cooled, with companies such as Metaplanet seeing share prices tumble more than 70% from their peaks.
Analysts suggest Bitcoin’s muted response reflects low market liquidity and the nature of institutional buying, which mostly occurs off exchanges and doesn’t immediately move prices. Broader macroeconomic uncertainty, from renewed trade tensions to shifting Fed policy expectations, has also dampened risk appetite.
Finsum: Many market observers remain optimistic, expecting Bitcoin to regain upward momentum once retail demand and liquidity return later in the year.
Cybersecurity stocks have surged in 2025, fueled by rising global hacking incidents and enthusiasm for AI-driven protection tools. Firms like Zscaler, Cloudflare, and CrowdStrike have gained between 50% and 77% this year, far outpacing broader software benchmarks such as the iShares Expanded Tech-Software ETF.
The sector’s strength is being reinforced by record corporate spending, highlighted by Alphabet’s $32 billion acquisition of Wiz and growing demand for cloud-based security solutions.
Despite heightened competition from tech giants like Microsoft and Google, cybersecurity remains a top enterprise priority, with identity and cloud security expected to drive double-digit growth for years. Investors see continued consolidation and platform integration as key to sustaining momentum across the sector.
Finsum: Both attackers and defenders are increasingly using generative AI, creating new markets for firms specializing in identity and AI security like CyberArk and Okta.
Although the term “ESG” has become controversial and sometimes viewed as a marketing label, about 69% of institutional asset owners still report using it—primarily for consistency. Many prefer alternative labels: 57% use “sustainable investment,” 53% “sustainability,” and 52% “responsible investment.”
ESG considerations now apply to an average of 44% of asset owners’ AUM globally, up from 42% last year. In 2025, 20% of respondents said they apply ESG to more than 75% of their portfolios, and 10% said ESG applies to 100% of their assets.
Asset owners increasingly see ESG as aligned with fiduciary duty: 61% agree ESG supports that role, up from 53% in 2024.
Finsum: The biggest barrier to broader ESG adoption is concern over impacts on investment returns or a lack of standardized data and reporting.