Smart Beta

Broadly speaking, investors eyeing retirement often have many goals in mind, particularly income. And when inflation, geopolitical uncertainty, and rising interest rates are all playing out at the same time, achieving this can often present a challenge.

Voters sent a clear message about data centers on Tuesday. We take it seriously. But data centers are one node in a larger AI-infrastructure build: chips, networks, power, cooling, sites and the capital that funds them. We have to look past the heavy rhetoric to what the policy can actually do.

Dividend ETFs have long been an investor favorite for their unique defensive flavor and total-return profile in the face of sticky inflation, rising interest rates, and volatile markets. While bonds may struggle with price erosion in rising rate cycles, and growth equities may face valuation compression, dividend stocks can offer resilience through cash flow and lower equity duration.

The U.S. midterm election results could slow the AI buildout and near-term issuance but are unlikely to materially reduce its ultimate scale or financing needs. The pace of supply may slow, but concentration risk is unlikely to dissipate, reinforcing the case for diversification into high quality securitized products and emerging markets (EM).

One of the bigger takeaways from the 2026 midterm elections was that people don’t like data centers. And it’s not hard to understand why. They consume enormous amounts of electricity and water. They can create persistent noise for nearby communities.

In a week that once again featured solid economic data, stocks faltered as investors continued to question the sustainability of the AI boom.

I like to de-stress at day’s end by watching videos that relax me. Puppies and painters are among my favorite subjects. During election seasons, however, sharp-edged political ads precede the feature presentations, raising my anxiety. So I am very happy that the 2026 midterms are over.

Despite some volatility caused by the midterm elections last week, mega-cap cash flows remain resilient, earnings continue to come in better-than-expected, and corporate balance sheets remain fundamentally sound even as late-cycle pressures emerge.

The S&P 500, Dow Jones Industrial Average (Dow), and Nasdaq Composite are all stock market indexes used to measure the performance of various aspects of the U.S. stock market. The indexes generally rise and fall together; however, the extent of gains or losses produced by each can differ depending on market conditions and the state of the economy.

Rafay Farooqui, CEO and Founder of SUBSCRIBE, joins Tony Davidow to discuss the future of fintech within private markets.

Let’s start with the inverse relationship between bond price and the yield. When a bond is issued, its coupon is fixed for life. The only thing that changes is the yield that new buyers demand. Let me explain.

If you’re considering changing firms in 2027, use the remainder of 2026 to establish readiness and explore a rapidly shifting economic and geopolitical landscape. Before committing, review your restrictions, confirm client-data boundaries, assess account portability, compare the economics, and determine what your next business model requires.

Tuesday’s midterms were one for the history books. Democrats won control of both the House and Senate, and they picked up governorships in Ohio, Texas and Georgia. Kansas elected a Democrat to the Senate for the first time since 1932. Our home state of Texas did so for the first time in 38 years.

Our investment teams weigh what comes next for stocks, bonds, and AI to help you explain what may come next.

Election Day delivered a decisive shift in the political landscape. Democrats regained control of both the House and Senate and captured several key governorships. Affordability concerns, unease about the economy and dissatisfaction with the war in Iran all played a role, consistent with polling heading into the vote.

Politicians, particularly when they’re on the winning end of the deal, often say “elections have consequences.” It’s true. And it’s wisdom that advisors and muni bond investors need to remember.

I try not to write about politics in this letter. I’d rather focus on economics and investments. But this week, politics impacts economics so we need to address it. Let me see if I can express what I think many voters were feeling.

The most important number in October’s inflation reports wasn’t the one that made the headlines. Everyone watched the Consumer Price Index print 3.7%. Far fewer noticed the Producer Price Index for final demand. It jumped 1.3% in a single month, the largest gain since March 2022, and the annual rate hit 6.3%.

The magnitude of the Democratic victories in both the Senate and gubernatorial races was surprising and exceeded what many market participants appeared to be pricing. While the outcome is politically significant, investors should resist the temptation to view it as an immediate economic regime change.

In this educational video, Chuck Carnevale, Co-Founder of FAST Graphs, explores the fundamentals of stock valuation and demonstrates how investors can use earnings, growth rates, and historical valuation references to make more informed investment decisions.

The strong October nonfarm payrolls report has effectively settled the debate over what the Federal Reserve (Fed) is likely to do at its December Federal Open Market Committee (FOMC) meeting. We expect the Fed to raise the federal funds rate by another 25 basis points. Beyond December, however, the outlook remains far less certain. We continue to expect the Fed to remain on hold throughout 2027.

A global tech rout continues to remind investors that volatility can strike at any time. That’s especially true in today’s market environment, where stretched megacap technology valuations and broader equity indices have elevated concentration risk.

Domestic demand for gold bars and coins tends to rise modestly under Democratic administrations. However, elections have not historically had a significant impact on gold’s global performance over the long haul.

Chris Galipeau discusses high-conviction insights that go beyond media headlines.

Portfolio Manager Denny Fish explains why the market was justified in assigning a higher level of regulatory risk to the AI ecosystem after the midterm elections. But in his view, the secular strength of this theme, along with the massive bottlenecks and geopolitical implications, mean that this historic investment cycle will likely continue.

Franklin Templeton Institute’s Stephen Dover and Larry Hatheway opine on the US stock market’s recent volatility in the wake of the US midterm elections and the path forward for investors.

Traditionally speaking, when one is choosing to lean into a particular sector of the equity market, they’re going to want to lean into the one that’s offering the best performance.

The big story last week? The Federal Reserve paused despite stronger growth and persistent inflation. It was a hawkish pause, with a December hike still the base case, according to Franklin Templeton Fixed Income. Third-quarter gross domestic product showed the US economy's resilience, but also its growing dependence on artificial intelligence investment, and household purchasing power took a hit.

In recent years, getting tech exposure was easy. You bought an index fund, whether a mutual fund or an ETF, and let the biggest names carry the portfolio. Now, those names make up such a significant share of large-cap indices that advisors are getting nervous. Indeed, many are looking elsewhere for the next stretch of compounding growth typically associated with the tech sector.

Democrats won control of both the House and Senate in Tuesday’s midterm elections, according to The Associated Press. The results set up a divided government for the final two years of President Donald Trump’s term. This could have repercussions when it comes to healthcare stocks.

Investors are grappling with an evolving set of risks as 2026 draws to a close. The scale of the AI build-out is influencing more sectors and industries. Rising interest rates are reshaping market dynamics as inflation threats linger.

Understanding the FAFSA process can help families navigate college financial aid. Bill Cass, director of US Wealth Planning, explores five important considerations, from income and assets to application timing and aid offers.

A stock trading at half its former price is not necessarily a bargain. Perhaps its earnings power has halved or its balance sheet can no longer support the business. Maybe its generous dividend is being financed with borrowed money. A low valuation ratio tells us what we are paying relative to one measure of fundamentals. It does not, by itself, tell us what the business is worth or whether those fundamentals will endure.

The 2026 midterms may have changed Washington, but they haven’t changed the macro regime. Tariffs, geopolitics, and deficits remain key forces for investors.

The votes have been cast. While control of the House and Senate has been decided, now we wait for the final tallies (and celebrate the end of the political ads — at least for another 20 months or so). We’re not political strategists, but policy does move markets, so it’s important to pay attention.

Amid a rapidly changing world, where China’s rise as an industrial powerhouse has nations around the globe on alert, we believe that American reindustrialization will be an important driver of investment returns in the decade ahead. 

We have been writing extensively about the rapid evolution of crypto ETFs, and recent data reinforces why digital assets remain top of mind for wealth managers. According to CoinShares, financial advisors hold roughly 55% of Wall Street’s total bitcoin ETF stake at the end of the second quarter, cementing their role as primary drivers of long-term digital asset adoption.

Duration management is a key function of fixed income portfolio management. However, as yields have moved approximately 100 bps in 2026 and the monetary regime has sharply changed from rate cuts to rate hikes, duration management has come into greater focus.

Municipal bonds posted their best month since 2023. See how high-yield muni ETFs help advisors capitalize on the municipal market recovery.

On the surface, financial conditions appear to be easing: the FOMC held rates steady last week, and Treasury yields have retreated from their recent highs. But that rally reflects a flight to safety, driven by growing questions about the durability and financing of the AI investment cycle.

The voters have spoken, and they’ve decided that divided government is the best path forward. Democrats have been handed a majority in the House and Senate where they’ll have to work with a Republican president to manage the country’s financial well-being. What does history tell us about markets and the economy under divided rule? Here are four things that investors should consider.

If history is any indication, when push comes to shove, the Fed will ultimately choose more easy money despite elevated inflation to support the markets and the broader economy.

October reminded investors that markets rarely move in response to a single factor. The US economy continued to expand at a moderate pace, supported by healthy consumer spending and solid business activity, even as markets contended with higher energy prices, renewed inflation concerns and heightened geopolitical tensions.

Retirement confidence is a matter of perspective. While many defined contribution (DC) plan participants believe they’re making progress toward retirement savings, relatively few are certain they’ll have what they need at the finish line. And when the conversation shifts from turning savings into the increasingly important final step of generating sustainable income, their understanding becomes even less clear, according to our latest survey.