Robo-advisers popular with millennials are gaining a following among baby boomers, and new features are making them more attractive still for those nearing retirement. Anne Tergesen explores how well these automated offerings from Vanguard, Schwab, United Income and Betterment work for a hypothetical 65-year-old couple.
Investors can personally manage retirement accounts, though certain types of investment are barred, writes Mark Kohler. There are some restrictions, so "anyone self-directing an account is advised to speak with a tax advisor or lawyer who thoroughly understands the topic," he writes.
Consultant David Lawrence writes that advisory firms frequently hit a "revenue ceiling," in which profit growth stalls no matter how much money is spent on new systems or staff. He argues this is the result of persisting with the same management techniques used at the outset of the business and offers tactics to overcome the problem.
AIMA CEO Jack Inglis says the EU's revised Markets in Financial Instruments Directive is likely to particularly reduce fixed-income research, leading to "less rigorous original thought in the marketplace for the investment process." Recently, the UK Financial Conduct Authority created some surprise among brokers when it said the research rules would apply to content generated by sales traders who accept orders on trades and commonly outline trends and offer "market color" to clients.
Institutional Investor's All-America Buy Side Compensation report estimates that hedge fund portfolio managers will receive compensation of nearly $1 million on average this year. Portfolio managers who also work as research analysts, meanwhile, have average compensation of $1.45 million, the report says.
An iCapital Network survey found that single-family offices have a marked appetite for alternative investments, with 87% allocating one-tenth of their portfolios to them and 27% making allocations of at least 15%. Private equity funds and hedge funds are SFOs' most popular alternative investment strategies, the survey found.
India's goods and services tax should be enforced in a way that is beneficial to the alternative investment industry, write Padmanabh Sinha and Rajat Tandon of the Indian Private Equity and Venture Capital Association. The tax is likely to expand opportunities for institutional investors, but it could be a burden for India-domiciled asset managers' alternative investment funds, which aren't exempt, Sinha and Tandon write.
Lawmakers seek to increase the number of investors who can participate in private securities offerings and boost the lending capability of business development companies. The House has passed an accredited investor bill, and Anya Coverman, director of government affairs and general counsel at the Investment Program Association, says there is growing momentum for it in the Senate, adding "you hear a lot that Senate members, especially on the Banking Committee, want to work on legislation that has bipartisan support."
Cole Real Estate Income Strategy has had the highest five-year average returns of 7.9% thanks in part to its approach, writes analyst Michael Stubben. The perpetual life real estate investment trust focuses on net lease properties as well as retail properties at 82% of its portfolio, providing long-term leases with contractual rent growth.
Blackstone Real Estate Income Trust and Steadfast Income REIT have entered into a partnership that will allow Blackstone to acquire a 90% ownership interest in 20 of the 63 apartment communities owned by Steadfast. Blackstone will pay about $460.8 million in cash and debt assumption as part of the deal.