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Wealth managers warning about portfolio risk

“Given concerns about increased volatility, fund selectors are explicitly telling us that the Model Portfolio is likely to take a prominent place in the 2022 plans as they seek to offer an integrated, risk-based solution that enables investors to take a more aggressive approach to the future.” can help them navigate a risky market environment.” said Dave Goodsell, executive director of Netixis IM’s Center for Investor Insight. “At the same time, many seek to supplement their core model offering with non-correlated investments and other specialized strategies.”

Over the next two years, fund selectors plan to:

  • Model Portfolios: 84% of fund selectors currently offer model portfolios and 57% of them report an increasing need for specialized models to complement their core portfolios. They plan to add top sleeves or strategies that include models focused on tax management (43%), options (40%), ESG-focused (37%) and income generation (35%).
  • ESG investing: 58% are adding more ESG-focused investment options. More than half (55%) say that considering ESG factors is an integral part of sound investing, and the same percentage (55%) also agree that ESG investment is to be found.
  • Private property: 52% plan to add more private investment investments, where 74% say there is a significant delta in returns from public markets. They look at the most attractive sectors for private equity investment: infrastructure, information technology, health care and real estate.

Crypto Remains Relevant But Risky

More than 4 out of 10 respondents said they feel pressured to offer cryptocurrencies, primarily to attract younger investors.

However, more than two-thirds of fund selectors do not think individual investors should have exposure to cryptocurrencies and 86% agree that these assets need to be more transparent.

84% believe regulatory oversight is required and 71% say their firm needs more education in digital assets and cryptocurrencies before investing.

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