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The Chilean Fintech Fraccional Goes International with a Project in Miami

(cedida) Fundadores de Fraccional.cl (de izq a der): Julián Blas, COO; Tomás Charles, CEO; y Patricio López, CTO — Photo courtesy

The fintech Fraccional (Fraccional.cl) has taken a step forward in the internationalization of its model, which is based on fractional real estate investment, expanding beyond the borders of Chile. This milestone involves a project in Miami, United States, a market they describe as highly profitable and dynamic.

According to Julián Blas, COO and co-founder of the company, in a press release, this initiative responds to demand for assets in the U.S. market—characterized by its stability and dollar-based denomination—from its users.

Fraccional’s model is anchored in crowdfunding to invest in real estate projects, significantly lowering the entry barrier for this type of asset. For the Miami project—a market historically reserved for high-net-worth individuals—investors can participate with as little as $300.

The system brings together individuals interested in investing in the fintech’s residential real estate development projects. Investors purchase shares through a joint-stock company, becoming partners. From there, in addition to property appreciation, contributors receive rental income from the properties.

A Market of Interest

The first development of the Miami project targets the upper-middle class and will be located in the northern part of the city. It replicates Fraccional.cl’s traditional model, where investors acquire fractions of real estate projects. “We maintain our essence: simple and accessible investment but with a global perspective,” Blas stated in the press release.

For its entry into the U.S. market, Fraccional will work with experienced real estate companies that meet strict requirements, such as having approved building permits. “We have chosen partners with whom we already have experience in Chile, such as Copahue and GFU, linked to successful developments in Ñuñoa, for instance,” Blas detailed.

The fintech emphasizes that Miami has shown sustained growth in housing demand, describing it as a high-appreciation market.

In 2023 alone, the city received over 54,000 migrants, contributing to a market with high turnover and projects that typically sell within one to two months. This dynamism has established Miami as a preferred destination for international investors, including Chileans, the company stated.

Plans for Expansion

The initial Miami project will be followed by a second initiative, focusing on the lower-middle class and located in the southern part of the city.

Looking further ahead, the fintech is also exploring opportunities beyond the U.S. market. It has its sights set on Latin America and Europe, particularly Spain, where it plans to launch coastal projects for residential and vacation purposes.

“With this strategic move, Fraccional.cl aims to establish itself as a key player in the fractional real estate investment market, offering attractive and accessible alternatives for small Chilean investors interested in dollarizing their assets and diversifying risks,” the press release concluded.

The Transition Period in North America Is an Opportunity to Invest

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(Wikpedia) Donald Trump, Claudia Sheinbaum — Wikimedia Commons

North America is undergoing a period of political and economic transition that may generate investment opportunities, especially in the markets of Mexico and the United States, despite the challenges. This is outlined in the Mexico 2025 Strategy report, prepared by the research team at Grupo Bursátil Mexicano (GBM) Casa de Bolsa.

The Latin American country recently experienced a change in government just over two months ago, with its first woman president in history, Claudia Sheinbaum Pardo. Meanwhile, in the United States, Donald Trump will take office for a second term on January 20, following a decisive victory in the election on November 5, 2024.

GBM highlights that a selection of Mexican companies reflects some of their most attractive valuations in decades, driven by a changing social and political landscape across the region. The brokerage firm supports increased portfolio exposure to defensive names, particularly in resilient sectors in such contexts, such as consumer goods and infrastructure.

The specialists behind the report identified three factors that could benefit Mexican equities next year:

Strong domestic consumption dynamics:
Mexico maintains robust internal consumption dynamics, supported by social programs and a rising wage base in recent years. Additionally, the purchasing power of remittances has regained momentum after the dollar strengthened against the peso in the second half of 2024.
Strategic location in North America and a robust manufacturing sector:
The region continues along a path of supply chain integration, facilitated by Mexican corporations with leadership positions not only nationally but also in the United States. GBM also identified investment commitments in the infrastructure sector for the 2020-2029 period that are 43.3% higher in real terms than the previous decade, strengthening the country’s medium- and long-term outlook.
Potential for growth in infrastructure and housing:
With the potential consolidation of nearshoring, the country may be at the beginning of a period of infrastructure growth. Additionally, the positive economic impact of this trend could increase the population’s purchasing power, triggering significant demand for housing.

The GBM analysts further note that the effect of nearshoring could boost exports and foreign direct investment even more, leading to significant economic benefits in the logistics and energy sectors.

Other analysts from investment firms have emphasized in their year-end reports that they continue to favor U.S. equities, at least in the early phase of Trump’s second term.

Franz Berdugo Joins JP Morgan in Miami

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J.P. Morgan has added Franz Berdugo to its Miami office, coming from Bci, according to a post by the private banker on his LinkedIn account.

Berdugo, with over 10 years of experience in the Florida city’s financial industry, will serve as Vice President after working throughout 2024 at Bci.

Before joining the Chilean bank, he worked at Safra from February 2023 to May 2024, where he held roles in portfolio management.

Additionally, Berdugo spent nearly six years in the portfolio management division at Morgan Stanley, also in Miami, from May 2017 to November 2022.

Earlier in his career, he worked as a Relationship Manager at Citi for three years.

Berdugo holds a Bachelor’s degree in Business Administration from Florida University and is certified with FINRA Series 7 and 66 licenses.

U.S. Consumer Confidence Declines in December

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Increase in RIA consolidations industry dynamics — Image Developed Using AI

The U.S. Consumer Confidence Index by The Conference Board dropped 8.1 points in December, reaching 104.7, marking a decline compared to November, when Donald Trump won the elections.

Additionally, the Present Situation Index, based on consumers’ assessment of current business and labor market conditions, fell 1.2 points to 140.2, according to the report.

“While weaker consumer assessments of the present situation and expectations contributed to the decline, the expectations component experienced the most significant drop. Consumers’ views on current labor market conditions continued to improve, consistent with recent employment and unemployment data, but their assessment of business conditions weakened,” stated Dana M. Peterson, Chief Economist at The Conference Board.

On the other hand, the Expectations Index, which reflects consumers’ short-term outlook on income, business activity, and labor market conditions, fell 12.6 points to 81.1, just above the threshold of 80, which often signals a recession.

Compared to November, consumers in December were substantially less optimistic about business conditions and future income. Additionally, pessimism returned regarding future employment prospects after cautious optimism prevailed in October and November, Peterson added.

Adult Consumers Are the Most Pessimistic

Among age groups, the decline in confidence in December was led by consumers over 35 years old, while those younger than that range were more confident.

Among income groups, the drop was concentrated among consumers with household incomes between $25,000 and $100,000, while those in the lower and upper income brackets showed only limited changes in confidence. On a six-month moving average, consumers under 35 years old and those earning more than $100,000 remain the most confident.

In December, consumers were slightly less optimistic about the stock market: 52.9% expected stock prices to rise in the coming year, compared to 57.2% in November.

Similarly, 25% of consumers anticipated stock prices would fall, up from 21.7%. The proportion of consumers expecting higher interest rates over the next 12 months rose to 48.5%, but remained near recent lows.

The percentage of those expecting lower rates dropped to 29.3%, down from recent months but still relatively high, Peterson noted.

Michael Rubenstein Joins UBS Private Wealth Management in Florida

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The responsibilities of Rubenstein, who will be based in Naples, Florida, will include business development, relationship management, trust and estate planning, financial planning, and investment management, according to the statement accessed by Funds Society.

“With offices in Naples, Short Hills (New Jersey), and New York, The Matina Group has been advising clients in Naples and across the United States for more than two decades,” adds the information from UBS.

The multigenerational team of thirteen members focuses on providing clients with boutique-level services “through thoughtful advice, customized solutions, and a first-class client experience.”

Rubenstein previously worked as a senior trust advisor and brings more than 15 years of experience in the legal and wealth management sectors. He is licensed to practice law in both Florida and New Jersey.

“We are incredibly proud to welcome Michael to our exceptional team, The Matina Group at UBS,” said Joe Matina, Managing Director and Private Wealth Advisor at UBS.

Born in Southwest Florida in 1989, Rubenstein earned a Bachelor of Science degree from Vanderbilt University, a Juris Doctor, and a Master of Business Administration (MBA) with specializations in Tax Law, Trusts and Estates Law, and Finance from the University of Miami.

He also holds a Master of Laws in Taxation from Villanova University.

After working in Palm Beach for five years, he returned west with his family in 2017, where he worked for Akerman LLP as an attorney specializing in tax law, wills, trusts, and estates.

Currently, he serves on the board of the Jewish Federation of Greater Naples and the Starability Foundation. He has also been a board member of the Naples Therapeutic Riding Center, the Golisano Children’s Museum of Naples, and Ronald McDonald House Charities of Southwest Florida.

Artificial Intelligence and Uranium ETFs: Investor Preferences in 2024

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AI and uranium ETFs — Photo courtesyRahul Bhushan, Managing Director in Europe at ARK Invest

Each month, Rahul Bhushan, Managing Director in Europe at ARK Invest, shares the standout data from the European thematic ETF market: key trends, changes in investor flows, and more. In his year-end 2024 edition, he chose to analyze November’s investment flows, uncovering several highly relevant insights.

The expert highlights three key areas of inflows:

1.- Artificial intelligence ETFs recorded inflows of $172 million in November, “highlighting investor enthusiasm as the AI boom shifts from hardware-driven infrastructure development to software applications that unlock real productivity gains,” says Bhushan.

2.- Uranium ETFs attracted $90 million, reflecting the anticipated growth of alternative energy sources. “Donald Trump’s reelection as U.S. president signals a return to pragmatic energy policies that position nuclear energy as a cornerstone of resilience and efficiency,” Bhushan explains.

3.- Infrastructure ETFs led inflows with $81 million in November, underscoring strong investor interest in domestic infrastructure. “Infrastructure stocks tend to perform well in election years and are bolstered by Trump’s plans to rebuild and reindustrialize America, signaling sustained growth in this sector,” the expert adds.

Bhushan also noted trends in the thematic ETFs that underperformed during the month:

1.- Clean energy ETFs recorded the largest outflows, with $152 million in redemptions. Investor appetite appears to be shifting beyond the capital-intensive renewable energy generation supply chain. “Instead, attention is increasingly focused on more profitable areas of the value chain, such as energy efficiency solutions and software-based grid infrastructure, where companies are better positioned to deliver short-term returns,” he notes.

2.- Cybersecurity ETFs saw outflows of $75 million, as investors took profits after a strong performance period. However, as cyber threats grow more sophisticated and AI transforms security environments, Bhushan explains that the need for robust digital defenses continues to drive long-term opportunities in the sector.

3.- China ETFs experienced redemptions of $64 million, “highlighting persistent investor concerns about geopolitical tensions and a shift toward more predictable growth opportunities in Western markets.”

Longer-Term Observations

The available data, covering nearly the entire year with only one month remaining, is sufficient to draw conclusions about investor preferences in 2024.

Among the highlights of the year are:

1.- Artificial intelligence ETFs, which have led investment inflows with $1.78 billion. AI continues to capture investor attention as a transformative force, with significant advancements and applications across all sectors bolstering confidence in this theme.

2.- Smart grid ETFs, with investment flows totaling $405 million, “highlighting the demand for infrastructure supporting energy efficiency and modernization of the power supply,” according to Bhushan, who adds that as digital infrastructure expands, “smart grids will be critical for managing energy effectively.”

3.- Uranium ETFs, which have accumulated $250 million in subscriptions, reflecting growing interest in nuclear energy within the broader energy transition. “Investors see nuclear energy as a reliable and scalable energy source for decarbonizing the energy mix.”

Key trends among the most lagging ETFs included:

1.- Robotics and automation ETFs have experienced the largest outflows, with a total of $996 million. As investors focus more on AI, interest in broader areas like pure industrial automation may be waning amid a shift in thematic preferences.

2.- Clean energy ETFs have recorded outflows of $834 million. This narrower focus within the energy transition theme appears to have seen cautious positioning, according to the expert, “especially ahead of the U.S. elections and potential regulatory changes.”

3.- Electric vehicle and battery technology ETFs have seen redemptions of $761 million, “likely reflecting caution in the lead-up to the U.S. elections.”

The Trump Effect on Emerging Markets: Flows Exit Equities and Enter Debt

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In early November 2024, under the watchful eyes of global markets, the U.S. electorate chose Donald Trump as its next president. Emerging markets were not immune to the effects of the “Trump trade” on international exchanges. The region saw positive net inflows overall, but with outflows in equities.

Figures from the Institute of International Finance (IIF) show that non-resident portfolio flows to emerging markets reached a net $19.2 billion in November. This result, they added, was marked by a strong divergence between fixed income and equities.

Emerging market debt markets attracted $30.4 billion net, “highlighting the persistent search for yield amid global uncertainties,” according to the entity’s economist, Jonathan Fortun. In contrast, equities saw net outflows of $11.1 billion, “underscoring the fragility of investor confidence in the face of evolving political and economic landscapes.”

According to Fortun, the U.S. elections—which resulted in the Republican Donald Trump becoming the next president—and their effects have cast “a long shadow” over global markets, deeply influencing the dynamics of flows into emerging markets.

“While October saw increasing uncertainty surrounding the election itself, November’s flows were shaped by market reactions to the election outcome and the implications of the new administration,” Fortun noted.

Latin America and China

Breaking down the international portfolio flows, IIF figures show a preference for Latin America in the penultimate month of the year. The region, according to the report, attracted the largest net capital inflow, totaling $6.5 billion.

This was followed by Emerging Europe with $4.8 billion net, and Emerging Asia with $4.6 billion. The most modest inflow in the category was recorded in Africa and the Middle East, which saw a net inflow of $3.4 billion.

Echoing the geopolitical concerns surrounding the Trump era, China was particularly impacted that month.

Chinese equities extended their downward trajectory, registering an outflow of $5.8 billion, continuing the trend observed in October, according to the IIF. “This sustained pessimism around Chinese equities is anchored in a confluence of factors, including regulatory concerns, a slowdown in economic growth, and persistent geopolitical tensions,” Fortun explained in the report.

In contrast to the $37.3 billion that flowed into emerging markets excluding China, the debt markets of the Asian giant saw net outflows of $7.5 billion.

That said, capital outflows from Chinese equities were not the sole source of negative flows in emerging markets. Excluding that market, outflows still amounted to $5.3 billion.

The Five Investment Mistakes to Avoid During a Crisis, According to Julius Baer

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Five investment mistakes in a crisis — Pixabay CC0 Public Domain

So far, and fortunately, most economic projections for 2025 are far from catastrophic, although experts believe there is a fair amount of uncertainty. Since a crisis can never be ruled out, we summarize a note from Julius Baer highlighting the five mistakes to absolutely avoid.

Diego Wuergler, Director of Investment Advisory, offers guidance on how to best face a crisis.

But let’s start with definitions: What is a market correction?

“A financial crisis is defined as a sharp market correction of around 40% to 50%, in contrast to a typical market correction, which usually ranges between 10% and 15%,” explains Diego Wuergler.

“In the past 25 years, we’ve seen three of these major corrections. So, we can do the math. Roughly every ten years, we could expect a significant market drop.”

Avoid These Five Investment Mistakes During a Crisis

Mistake 1: “Let’s sell for now and wait for the dust to settle.”

The equivalent for investors holding a lot of cash would be: “Let’s hold onto the cash and wait for the dust to settle.”

The alternative view: Instead of selling out of panic or waiting too long, it’s much better to build solid exposure structured around well-defined long-term investment themes from the start. Examples include investing in U.S. equities, automation and robotics, cybersecurity, energy transition, artificial intelligence and cloud computing, and longevity. Since these themes represent long-term structural trends, short-term market corrections should not undermine their underlying logic.

Mistake 2: “The market is wrong.”

The market is not wrong; we, as individuals, are wrong. At any given moment, the market reflects all publicly available information (fundamentals) as well as investor psychology (momentum).

The alternative view: Never fight a trend. Most of the time, several weeks or months later, we understand why the current market is trading at its levels. It’s better to listen to what the market tells us and adjust only when a trend changes. The current secular bull market began in May 2013. On average, such periods last between 16 and 18 years.

Mistake 3: “This time is different.”

This belief is a common trap in investing. We may have felt this way recently due to experiencing an unprecedented global pandemic, but the context is always different. For example, during the tech bubble of 2000, sky-high valuations dominated the conversation, while the 2008 financial crisis was marked by the collapse of the financial system, not the market itself.

The alternative view: What never changes in a financial crisis is our behavior or reaction, which is always based on greed and fear. Once the nature of market corrections is understood, it becomes much easier to control emotions and avoid making counterproductive decisions.

Mistake 4: “I can’t sell this stock at such a loss. Let’s hold onto it for a while and see what happens.”

Avoiding a loss (and holding onto zombie stocks) is one of the worst strategies, according to Diego Wuergler. Usually, “what happens next” is absolutely nothing, as these stocks go nowhere.

The alternative view: A crisis changes the world. It clearly defines the winners and losers, so you need to quickly sell the losers. Don’t hold onto cash but reinvest it in structural winners. An unrealized loss is still a loss. As Deputy Chief Investment Officer Michel Munz of Julius Baer also pointed out, the best way to recover quickly from previous losses is to ensure that what we have now will outperform in the future.

Access the full article at this link.

2025: A Year of Uncertainty Following a Positive 2024 for Credit Ratings

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2025 uncertainty for credit ratings — CC-BY-SA-2.0, Flickr

Significant central bank rate cuts, healthy balance sheets, and a global economic growth slowdown of only 0.2 percentage points support a broadly neutral credit outlook for 2025, according to Fitch Ratings.

However, the ongoing economic slowdown in the United States and China, the fragility of the eurozone’s recovery, significant uncertainties surrounding U.S. economic policy, and geopolitical flashpoints pose key credit risks.

The year 2024 was marked by a combination of U.S. economic resilience, a tentative eurozone recovery, strong capital markets, and positive rating trends. Major global credit risks, including those stemming from inflation, geopolitics, and contagion from stressed valuations in key asset classes such as U.S. commercial real estate and Chinese residential real estate, did not materialize. The likelihood of a hard landing has diminished, even as the global economic cycle remains in recession, with both the U.S. and China expected to continue slowing in 2025.

Fitch’s ratings performance reflected a broad normalization of economic and credit conditions since the pandemic. The balance of positive and negative rating outlooks has returned to being nearly even for both investment-grade and below-investment-grade categories.

However, the agency warned of “significant risks and uncertainties.” The incoming Trump administration is expected to materially increase tariffs, raising the risk of a global trade war with negative implications for growth. Other potential U.S. policy priorities, such as tightening immigration restrictions and implementing tax cuts, could add to inflationary pressures. Political uncertainty in the U.S. will have global ramifications, posing a significant potential credit-negative factor for Europe, Asia, and other major U.S. trading partners. Global geopolitics in Europe and Asia remains a key risk.

Ready, Set, Go…: 124 Trillion Dollars Will Change Generations by 2048

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$124 trillion generational wealth transfer — Image Developed Using AI

With trillions of dollars changing hands annually, the “Great Wealth Transfer” is in full swing. Amid the acceleration of wealth transfers, it is crucial for wealth managers, asset managers, and other industry participants to adopt best practices with their current relationships while also adjusting their service and product strategies to align with the future profile of the high-net-worth segment, according to the Cerulli report titled High-Net-Worth and Ultra-High-Net-Worth Markets in the U.S. 2024.

Cerulli estimates that wealth transferred by 2048 will reach $124 trillion, with $105 trillion expected to be inherited by descendants and $18 trillion directed to charitable causes. Specifically, nearly $100 trillion will be transferred by baby boomers and older generations, representing 81% of all transfers. More than 50% of the total transfer volume ($62 trillion) will come from high-net-worth and ultra-high-net-worth (HNW/UHNW) individuals, who collectively represent just 2% of all households.

“Projections for horizontal or intra-generational transfers indicate that $54 trillion will be transferred to spouses before eventually being inherited by descendants and charitable organizations. Nearly $40 trillion of these spousal transfers will go to widowed women from the baby boomer and older generations, creating a massive need and opportunity for providers in the wealth and asset management spaces,” the Cerulli report states.

Additionally, Millennials will inherit more than any other generation in the next 25 years ($46 trillion). However, Generation X will receive the majority of assets over the next 10 years, totaling $14 trillion compared to $8 trillion for Millennials. “Eventually, most of the wealth from older generations in the United States will be donated or transferred to Generation X or Millennial heirs. With $85 trillion earmarked for these generations collectively, providers who can establish relationships and adequately address the needs of these younger investors will be well-positioned for success,” explains Chayce Horton, senior analyst at Cerulli.

Considering these intergenerational and familial movements, Cerulli emphasizes that developing relationships with clients’ spouses or children is one of the primary long-term growth strategies among high-net-worth practices, as the urgency grows for wealth to transition from primary clients to their spouses and children. According to 89% of firms surveyed by Cerulli in 2024, holding family meetings and maintaining regular communication among family members is a key practice.

“Ultimately, there are notable differences in service and product preferences between women and next-generation clients compared to the current client demographic. As wealth transfers, these differences will likely shift market share in favor of firms best prepared to meet the needs of these recipients,” Horton concludes.