Staying Ahead of the Game With Direct Indexing in Financial Advisory
Looking back, I believe the financial advisors who were most willing to adapt to changing times were generally more able to set themselves apart from the crowd and experienced a higher rate of success.
January U.S. CPI: A Small Setback for the Immaculate Disinflation
The consumer price index (CPI) for January showed that core inflation held steady at a rate of 3.9% last month, a small setback in a trend of moderating inflation in the U.S. Healing in global supply chains and a rebalancing of the U.S. labor market have helped to dramatically tame inflation over the past year.
What China’s Economy Means for Institutional Investors
China's economy has disappointed most expectations over the past year. China's need to rebalance from investment to consumption is coming when tensions with the U.S. are elevated. This could create continued volatility. We believe China does have the levers to alleviate some key challenges.
2024 Tax Rates: Essential Insights for Financial Advisors
When it comes to taxes, it's always best to be prepared for any future changes that could either benefit or hurt your clients. This year's inflation-related adjustments to tax brackets and standard deductions could give some of your clients more flexibility to manage their capital gains.
T+1 Settlement: Is Your FX Trading Impacted With the Equity Settlement Shift to T+1?
In February 2023, the Securities and Exchange Commission adopted rule amendments to shorten the standard settlement cycle to T+1 for transactions in U.S. securities including equities, corporate bonds, unit investment trusts, and exchange-traded funds.
Equity Factor Report – Q4 2023: Growth Strategies Rally on the Prospect of Lower Interest Rates
In Russell Investments’ factor portfolios, the Global Large Cap Growth, Momentum and Size factors outperformed the MSCI All-Country World Index during Q4, while the Global Large Cap Value and Low Volatility factors underperformed the index. The Global Lage Cap Quality factor was flat for the quarter.
Tax Loss Harvesting: Frequency Matters
Many advisors wait until the end of the year to harvest tax losses, but that may not be the best policy. Stock markets frequently go up in the last two months of the year so better harvesting opportunities may be available at other times.
Investing in Private Infrastructure: A Look at Insights, Trends and Expert Perspectives
More institutional investors are exploring infrastructure for diversification, income and stable return potential as well as inflation protection. Investors are looking at both the traditional segments and newer digital sectors along with renewables.
Q4 Active Management Review: Expectations of Easing Propel Markets Higher
The fourth quarter of 2023 was a more favorable environment for active managers in the UK, Europe, Emerging Markets, U.S. Small Cap and Listed Infrastructure, while being more challenging for U.S. Large Cap, Global, Global ex-U.S., Japan, Australia, Canada, Long/Short and Global Real Estate managers.
A U.S. Recession Looks Less Likely This Year. But We Believe the Risks Are Still Elevated.
There will be a lot of firsts for the economic history books if this business cycle can survive a labor market slowdown, 525 basis points (bps) of rate hikes and an extremely inverted U.S. Treasury yield curve.
Mastering 2024: A Financial Advisor’s Guide To Starting the Year Strong
Financial advisors are gearing up for a successful year and preparing for client reviews. We offer four actionable ideas and practices to help advisors address some key concerns many investors are having about the year ahead.
Incumbent Party Wins Taiwan Presidency, Loses Parliamentary Majority. What Could This Spell for Markets?
We don't expect tensions between China and Taiwan to intensify this year, due to China's improving relationship at the margin with the U.S. and China's likely focus on domestic growth.
Strategic Tax Planning: Kickstart the Year With Direct Indexing
Initiate the year with direct indexing, encompassing tax planning, personalized investing strategies, rejuvenating sidelined cash, and navigating concentrated stock positions or financial windfalls.
What Does the End of the Rate-Hiking Cycle Mean for Stocks?
Interest rates are one of the most important factors affecting the economy and the outlook for stocks. Managers increasingly think interest rates in the U.S. have likely peaked and are repositioning equity portfolios for the new environment.
How I Would Redesign a Shared DB/DC Retirement Program
We see both advantages and disadvantages to IBM's retirement program changes. One advantage is that more capital will be freed up for other corporate initiatives, while one disadvantage is that without a 401(k) match, participants may save less for retirement.
What Happened at COP28 and Why Does It Matter to the Average Investor?
When stakeholders convened at COP28, the 28th Conference of the Parties, from Nov. 30 to Dec. 12, it was with an unwavering acknowledgment of the real threat posed by climate change.
Portfolio Rebalancing, Part 3: Exposure Management Strategies in an Overlay Program
There's more to an overlay program than just cash equitization and systematic rebalancing. The flexibility of the program allows for several other exposure management strategies.
Winter Jacket: Considerations for Non-Profit Hospital Systems To Strengthen Their Portfolio Amid Economic Uncertainty and Operational Pressures
Macroeconomic uncertainty remains elevated. We believe a recession in 2024 is more likely than not. Non-profit hospital systems have faced significant operational pressures, and may continue to experience challenges in the near-term.
Capital Gain Distributions Are Still Not Your Friend. But Now, Interest Is Also Your Frenemy!
Funds will begin paying out their 2023 distributions this month which could lead to a tax bill for your clients. While capital gains distributions will likely be lower this year than in recent years, interest income is expected to be higher.
2024 Global Market Outlook: The Twilight Zone
It’s possible that a 2024 recession could be avoided, but we see recessions risks as remaining elevated in most developed markets. We believe there is limited upside for equities amid expensive valuations and recession concerns. Government bond valuations, however, look attractive in the U.S., UK, Canada, Germany and Australia.
Diversity in Investment Management: What Are the Latest Trends and Insights?
Our 2023 Manager ESG Survey shows that transparency around DEI data is increasing among investment managers. The results reveal that equity product managers in particular are more inclined to share DEI data compared to managers in other asset classes.
2023 Prudent Pension Funding Report: A Story of Positive Trends and Persistent Outliers
97% of corporate defined benefit (DB) plans can achieve full funding without a significant draw on corporate cash. This is an increase from the 86% noted in last year’s report.
COP28 – A Look Ahead
The main point under contention this year will be the phase-out of fossil fuels and the limited progress achieved so far. As more businesses make net-zero commitments, there is mounting pressure for greater government support through policies and incentives.
Falling UK Inflation: What Are the Implications for Pension Savings?
While the fall in inflation is welcome, the impact of higher interest rates on mortgage borrowers still has some way to play out. The reduction in inflation will help DB members that are drawing on their pension. Pension trustees should consider their investment strategy and support members with their retirement planning.
The 4 A’s of Preparing for Capital Gains Season
Taxes can have a significant and ongoing impact on an investment portfolio. Advisors can help their clients minimize that impact with a tax-smart approach. Advisors can prepare for capital gains season now, and potentially maximize their clients’ after-tax returns.
Portfolio Rebalancing, Part 2: The Private Markets Puzzle
Portfolios with large allocations to alternatives can have many benefits. However, alternative allocations can deviate meaningfully from policy, particularly during periods of equity-market turbulence.
The Energy Transition, Part 2: The Transition Challenge
Fossil fuels, particularly oil, are difficult to replace due to their availability, affordability and energy density. Low-carbon alternatives, like solar energy, need large amounts of space to produce comparable amounts of energy to oil.
How IBM Reopened Its DB Plan To Replace 401(K) Contributions
Starting in 2024, IBM will replace its 401(k) plan matching contributions with a new benefit earned within its overfunded DB plan, which has been frozen since 2008. This move essentially un-freezes the tech giant's DB plan.
Q3 Active Management Review: Value Dominates
The third quarter was a more favorable environment for active managers in U.S. Large and Small Caps, Japan, Australia, and Canada equities, while being more challenging for Global, Global ex-U.S., Emerging Markets, Europe, UK and Long/Short managers.
Q4 2023 Update: Real-Time Risk Exposure Report
Investors should be aware of potential real-time market exposure risks when implementing large changes to their portfolios. One market hour of misaligned portfolio exposure can have a significant impact on your portfolio’s performance outcome for the year.
Q3 Economic and Market Review: All Eyes on the Direction of Interest Rates
The direction of interest rates was the biggest factor moving markets in the third quarter. Sentiment on technology stocks appeared to shift. Money market assets reach historic high, but returns lag stock market.
Equity Factor Report - Q3 2023: Value Strategies Rally as Bullish Sentiment Dampens
In Q3, the strongest performance among factors was seen in developed ex-U.S. large cap and small cap and U.S. small cap, where Value outperformed by 4.9%, 3.3% and 3.3%, respectively. The weakest performance among factors was in U.S. small cap, where the Size factor underperformed by -2.4%.