Financial Advisors Are Worried About What ISIS Means For Their Clients' Portfolios

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Financial Advisors Are Making Changes To Clients' Portfolios Because Of The Ongoing Geopolitical Volatility (Wealth Management.com)

The ongoing geopolitical risks are leading financial advisors to make changes to clients' portfolios. Several advisors have repositioned their clients' portfolios "more conservatively over the last year, in anticipation of a correction." Additionally, advisors are limiting exposure to international markets.

The most threatening risk is ISIS, the extremist Sunni Islamic group attempting to establish a caliphate in the Middle East, according to Diana Britton. Advisors are worried that ISIS will cause disruptions in oil-rich areas, which will subsequently cause crude oil to "spike where if it remains elevated for a significant amount of time could cause further drag on world economies."

"If the Sunni/Shia wars in the Middle East result in a closure of the Strait of Hormuz, then around 17 percent of global energy production would be lost and prices would rise sharply, and the global economic recovery would be at risk," Tom Elliot, international investment strategist at deVere Group added.

Envestnet Just Hired The Ex-RIA President In Hopes Getting Closer To Advisory Firms (Financial Planning)

Envestnet picked up Jay Hummel, the former president and COO of RIA Lenox Wealth Management in Cincinnati. He's coming on as a senior vice president of advisor relations.

Envestnet is a leader in turnkey platform services for advisors (including: client reporting, portfolio and data management, analytics, and 'back office' service and administration).

Hummel has "been charged with making sure the Chicago-based platform provider is giving advisors what they need, and working with advisors to optimally implement the services," according to Charles Paikert.

"Jay's expertise in running a large RIA will help us engage with advisors and serve high-net-worth clients in a more scaled, efficient way," says Envestnet president Bill Crager.

Low Average Credit Quality Allocation Funds Might Be Bringing In Junk Bonds (Morningstar)

Allocation funds are the "workhorses" in many investors' portfolios, but "with high-quality bond yields ultra low, some allocation funds have assumed an aggressive posture with the fixed-income component of their portfolios," according to Christine Benz. In fact, a small subset of allocation funds currently "have durations longer than the Barclays Aggregate Bond Index's," and a larger number have "ventured down the credit-quality ladder."

The major worry about this is that if stocks happen to waver, numerous allocation portfolios with low credit qualities "would be likely to fall further than their high-quality counterparts."

However, despite that, investors don't need to "run away" from allocation funds with low average credit qualities. "That positioning has served many such funds well over the past five years, and in some cases over longer periods, too. It's also possible that these funds' managers could lighten up on low-quality bonds at some point in the future, thereby, protecting their charges on the downside."

Look At ETFs Now That Emerging Markets Are Having A Moment Again(Blackrock Blog)

Investors are turning their attention back to emerging-markets equity, according to the latest research. In August alone, they gained $4.7 billion. Blackrock's Heidi Richardson is suggesting that investors look to "exchanged traded funds (ETFs)."

"Actively managed funds seek to outperform a specific benchmark, and portfolio managers often have full discretion over how they attempt to do so. As such, many actively-managed funds aren't all that precise in the exposure they provide. Today, seeking exposure to a specific emerging or frontier market, or to the broader emerging and developing universe, is easier to do than it would have been just a decade ago as the index-tracking ETF market continues to grow. What's more, ETFs offer diversification and liquidity; they are also generally available at a lower cost than comparable actively managed funds."

This Family-Run Fun Has Been Nearly Doubling The S&P 500 Performance (Investment News)

The small Pennsylvania investment firm Biondo Group LLC is the top performer for long-short U.S. equity mutual funds. It saw a 56% gain last year and 17% this year - so far. Both years are almost double the S&P 500's performance.

The Biondo Focus Fun holds just 15 to 20 positions at a time, and "much of its success comes from more than tripling its money on Pacira Pharmaceuticals Inc." - whose stock has surged 1,400% since it's 2011 IPO.