A New Approach to Investment Due Diligence
Due diligence is a critical part of successful investing. It has been a standard practice for the better part of the century since the concept was included as part of the Securities Act of 1933, placing enormous liability on those who offer securities.
FINSUM + Magnifi: ESG Grows and Branches into New Territory
March 2021
The pandemic has shifted the paradigm for many investors as they look to environmental, social, and governance (ESG) to make up a larger share of their portfolio. ESG will shape the future of investing but there is a new way to invest in green companies with a new twist. Sustainably linked bonds (SLB) allow firms to receive money for green energy initiatives but rather they will pay a penalty if they don’t meet expectations. Marilyn Ceci head of ESG development at JP Morgan expects SLB to hit $120-150 billion despite issuance since inception being only around $20 billion. SLB isn’t a threat to ESG as the industry is expected to grow from $270 billion last year to over $400 billion this year, but rather a compliment to the growing industry. ESG's ability to withstand the full business cycle is a testament to its future.
FINSUM + Magnifi: Real Estate Set for Pandemic Bounceback
(March 2021)
Real estate investment trusts are poised for a rally as the economy begins to open. Many specific sub-industries like retail shopping malls and college dorms are ready for the biggest swings. It's not just these sub-sectoral swings either, in general REIT yields are up 3.5% outpacing the 1.5% of the S&P 500. Spirit Realty Capital, National Retail Properties, Macerich, Weingarten Realty, American Campus Communities, and Brixmor Property Group are all S&P mid-caps that have higher than average yields that could perform even better in 2021. These companies mainly comprise retail stores, shopping malls, gyms, college housing, and grocery stores. All industries will no doubt further benefit from the reopening.
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FINSUM + Magnifi: Walmart is Stretching its Legs in Fintech
(March 2021)
Walmart (WMT) is synonymous with most consumers for their household products, but the retail giant is expanding its frontier of offerings. Walmart hired Omer Ismail and David Stark from Goldman Sachs as part of their new Fintech subsidiary. Ismail and Stark worked for Goldman in their consumer banking business platform called Marcus which brought retail customers higher interest rates on deposits. Walmart plans to launch the retail company with Ribbit Capital. Ribbit is the venture capital firm that helped fund Robinhood, which has brought many retail investors to the stock market and was a major figure in the GameStock frenzy. Walmart believes it leverages its retail investor knowledge with Ribbit’s fintech expertise to make a major statement. Walmart already offers a variety of fintech and banking services: credit cards, cashing checks, money transfers, and financed installments. Walmart's retail customer base is enormous and could be a game-changer in fintech.
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FINSUM + Magnifi: Top Asset Manager Makes All Funds ESG
(February 2021)
ESG has been getting more and more mainstream, and yesterday it likely took the final hurdle to major acceptance. A top asset manager with almost $1 tn in AUM announced that from here forward, all its new funds would be ESG. The manager is DWS group, which is majority owned by Deutsche Bank. According to DWS, “Sustainability is more than a corporate topic, it’s a society topic and an industry topic”. The move follows UBS’ recommendation last year that investors choose sustainable investing over traditional investing. However, according to some US financial advisors, these kind of moves will come slowly in the US. “There is too much assets tied up in old money and not enough advisor support,” says Jeff Glitterman of Glitterman Wealth Management.
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How Magnifi Can Enhance Client Portfolios
What if you had a simple-to-use, advanced tool that guided you in giving every client portfolio an edge in an evidenced-based and systematic way? With Magnifi’s Enhancer feature, you do.
Magnifi’s Enhancer tool allows advisors to adjust existing accounts either at the fund level or by comparing them with model portfolios based on user-specified factors.
How Magnifi Answers Common Investment Management Questions
For investment firms, a robust client list means success in many ways. Your firm has put in the work, stood by its commitment to diligently managing client portfolios, and continually prioritizes helping clients achieve their investment goals no matter the market.
Discovery
As a financial advisor, your job is to get specific when it comes to knowing each client’s financial goals and where to put each client’s money in order to achieve those goals. After all, if individual investors had your nuanced expertise and arsenal of investing tools, why would they entrust their wealth to an advisor?
Fiduciary Risk and Magnifi’s New Fi360 Scoring
Advisors know that private wealth management is an increasingly competitive market. And while all advisors in the field should act as responsible fiduciaries by minimizing fiduciary risk, not all do.
As an advisor, this leaves you with two challenges. First, minimizing fiduciary risk in all portfolios, and second, demonstrating this minimized risk to clients and prospective clients. While that might sound daunting, with the right technology, it’s entirely possible.
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