Gen Z Chooses Excellent Credit Over TikTok Fame

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Credit Sesame published the results of a comprehensive study on the financial literacy and well-being of younger generations, particularly their understanding of credit and other personal finance matters. In the age of viral trends and digital consumption, Gen Z is rewriting the financial script, proving that their credit story is far from conventional.

A new survey, conducted by OnePoll on behalf of Credit Sesame, illuminates the complicated love affair between Gen Z and credit, challenging stereotypes and ushering in a new era of financial consciousness.

Amidst the TikTok craze, the survey unveils a startling revelation: 92% of Gen Z prioritizes a credit score of 750 or higher over the allure of tens of thousands of social media followers. This shift in priorities challenges preconceptions, painting a portrait of a generation that understands the impact of a robust credit history on their financial well-being.

Amongst other findings, a survey of 500 Gen Z and 500 millennials conducted by OnePoll on behalf of Credit Sesame revealed:

  • 66% of respondents believe that their credit score is a good measure of their financial health.
  • One-third believe that age-old myth that checking your credit score will affect it and 19% couldn’t correctly match the definitions of debit and credit.
  • 42% of respondents would rate their understanding of how credit scores work as “average to poor.”
  • 82% of respondents admit they struggle to keep up with their friends’ saving and spending habits (35% of millennials struggle “very much” vs only 24% of Gen Zers).
  • Credit card debt is impacting younger Americans’ larger goals, such as buying a house (35%), taking a dream vacation (29%) and saving for retirement (28%).
  • 44% of respondents said they would leave their bank due to poor customer service, compared to only 15% for failure to reduce their carbon footprint.

Credit scores have been the gold standard for creditworthiness for decades, yet the traditional credit scoring methods have long been a source of confusion for consumers, made evident by the survey results showing 42% of respondents rating their understanding of how credit scores work average to poor. Credit Sesame breaks down the barriers for everyone to build better credit scores, especially people with low or limited credit history, commonly seen amongst young people working to establish strong financial health.

Despite some of these knowledge gaps, Gen Z and Millennial respondents are abiding by age-old and wise money mantras, such as “time is money” (52%), “save for a rainy day” (46%) and “never spend money before you have it” (42%).

The study also underlines the difference between the two generations surveyed. Millennials reported opening their first bank accounts at 21 plus applying for their first credit cards and starting to pay rent around the age of 23. Meanwhile, Gen Z respondents started opening bank accounts and credit cards earlier, at 19 and 20, respectively. This notable drive to start their financial journey younger aligns with valuing peer experiences and collective wisdom on social media platforms like TikTok and YouTube over traditional authority figures in finance of generations past. Interestingly though, one in 10 of Gen Z said they do not currently have a credit card or credit score.

The survey also indicated that in-person banking and the use of cash seems to be going out of style: 43% of respondents prefer to bank online with 28% admitting they either “always” or “often” feel judged for banking in person. Similarly, 28% of Gen Z respondents “always” or “often” feel judged when using cash to pay, with more than a third of millennials sharing the same sentiment.

Women Express Greater Concerns about Cost of Living and Inflation than Men

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A recent survey by BMO Real Financial Progress Index has found significant disparities between men and women when it comes to concerns about cost of living and inflation.

Over the past three months, 61% of women expressed concern about the cost of living, compared to 54% of men. Similarly, 59% of women voiced concern about inflation, compared to 52% of men.

The survey also found that women are more likely than men to identify certain expenses as barriers to making real financial progress. Specifically, family-related expenses and monthly bills are more likely to be seen as obstacles by women (24% vs. 21% of men and 38% vs. 30% of men, respectively).

The BMO Real Financial Progress Index finds that more women than men say they share financial responsibilities with their partners, such as setting financial goals for the family (68 percent of women compared to 57 percent of men) and managing day-to-day finances like paying bills (50 percent of women compared to 44 percent of men).

Additionally, women are more likely to experience financial anxiety when it comes to keeping up with monthly bills (67% vs. 60% of men).

Overall, women are also more likely to be concerned about their financial situation, with 44% saying their concerns have increased over the last three months, compared to 35% of men.

Furthermore, women are less likely to feel in control of their finances, with 82% of men saying they feel in control compared to 71% of women.

Despite recent strides made by women in terms of pay, education, and workplace representation, these findings suggest that there are still ongoing challenges when it comes to achieving financial security and long-term wealth.

This article has been prepared with information from BMO, to see the full report of the firm click on the following link.

State Street Ventures into the US Offshore Business

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Heinz Volquarts, Head of Americas International (Canada and Latam) al State Street | LinkedIn

State Street has entered the US Offshore business after solidifying its position in Latin America. With approximately $10 billion in Mexico and a presence of $7 billion in the Andean region, through Credicorp Capital, the ETF-specialized manager meets a growing demand from banks, Heinz Volquarts, Managing Director, Head of Americas International (Canada and Latam) of the firm, told Funds Society.

Volquarts highlighted that US Offshore “is a really new business” for the firm and that it emerged as a response to major financial entities in the U.S., which were inquiring about products for non-residents.

State Street spent the year 2023 laying the groundwork for the business to start a “proactive” strategy from 2024 onwards. For this, they have promoted Diana Donk as the person in charge of ETF sales for the US Offshore business. 

Latin America

The executive reviewed the importance of the Americas market (excluding the U.S.) in terms of assets, highlighting Canada as the largest, followed by Mexico with about $10 billion, and then Chile, Peru, and Colombia, which together are close to $7 billion dollars.

Volquarts talked about the work they do alongside Credicorp Capital as a distributor and highlighted a synergy in the “sales effort and leadership vision”. The State Street team works in conjunction with the distributor: “we travel with them probably five or six times a year,” he explained.

Mexico, on the other hand, has a team in which Ian López is responsible for the business. They have around 83 products listed in the U.S. market that trade on the SIC of the Latin American nation. In addition, a list of 35 UCITS funds in the same country.

Regarding investor preferences, both in Mexico and US Offshore, the expert said that accumulation classes are the most requested strategies, however, not all State Street products are of these characteristics.

Consequently, Volquarts emphasized that if there is demand, they “could launch a new accumulation class in Mexico” and commented that a very effective way to expose oneself to the S&P 500 with UCITS is through the SPYL (TER=3bps) with State Street’s accumulation classes.

Regarding Chile, he said that UCITS are no longer the market’s biggest concern. While it is a very new regulation, the new double taxation treaty with the U.S. allows “to use U.S. products,” thus opening up a “more attractive” proposal, he argued.

Meanwhile, in Colombia and Peru, the opportunity for UCITS is more latent. In the Caribbean country, about 80% of the assets are housed in sectorial ETFs. In an election year in many influential countries such as Mexico, the U.S., India, and Russia, to name a few, investors “look for ways to position themselves depending on the market.” 

State Street is a manager heavily skewed towards equity ETFs given the enormous relevance of the SPDR ETF and all products related to the S&P500. Latin America follows the same pattern, and 90% of its assets are in equity ETFs, compared to 10% in fixed-income ETFs.

Finally, the Managing Director, Head of Americas International (Canada and Latam) of the firm highlighted “the success they have had with ESG strategies”. For example, one of their products, EFIV, has reached $1 billion in assets. Volquarts estimated that 70% has been sold to pension funds in Latin America, mainly in Chile, Colombia, and Mexico.

Vontobel SFA Expands Team in Miami with Alejandro Botero

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Photo courtesyAlejandro Botero

Vontobel Swiss Financial Advisers (Vontobel SFA) has appointed Alejandro Botero as Senior Relationship Manager to provide Latin American investors with diversified wealth management solutions.

With nearly 20 years of experience in relationship management and business development, Botero will focus on advancing Vontobel’s private client relationships with investors in Latin America, primarily in Colombia, Peru and Argentina.

Prior to joining Vontobel, Alejandro was a relationship manager and wealth strategist at BBVA Compass / PNC Private Banking, where he managed portfolios for Latin American and US clients and customized investment strategies and asset allocations based on client needs. Previously, he held senior roles at Santander Private Banking and HSBC.

He studied Economic Sciences at Pontificia Universidad Javeriana in Bogotá, Colombia.

“We are committed to helping investors achieve their financial goals through global investment diversification and customization,” said Victor Cuenca, Head of Vontobel SFA Miami Branch. “We are pleased to welcome Alejandro to our team in Miami and look forward to strengthening our reach to investors in Latin America.”

Vontobel SFA offers US and Latin American investors tailored solutions, centered on jurisdictional, geographic and currency diversification. Headquartered in Zurich, with offices in Geneva, New York and Miami, Vontobel SFA is the largest Swiss- domiciled wealth manager for US clients.

Cherry Bekaert: Clearer Skies Emerge for Private Equity Amidst Challenges

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Cherry Bekaert has published its annual year-end Private Equity Industry Report outlining important developments that impacted the private investment markets in 2023. The report found many headwinds that slowed private equity dealmaking in 2022 continued to impact the industry over the course of last year, causing deal activity to decline sharply for the second year in a row. The M&A environment is now grappling with its longest decline in over a decade.

The report highlights the many challenges faced by the sector over the last 12 months and features data provided by PitchbookTM and other sources, including proprietary Firm data.

Though many of the challenges were carryovers from the previous year (persistent high interest rates and inflation; a stark valuation gap between buyers and sellers; and general market upheavals), other emerging issues dampened deal activity.

Nevertheless, private equity as an asset class continued to show its resiliency as sophisticated dealmakers deployed innovative strategies to keep transaction activity on par with historic pre-pandemic averages.

The report unveiled several key findings, underscoring a trend where, for the second consecutive year, deal activity has trended downward. This trend was characterized by a sharp decline in deal volume and contracting valuation multiples, highlighting the challenges pervading the mergers and acquisitions (M&A) landscape. Deal makers have had to come to terms with the higher-for-longer interest rate environment, further complicated by the fallout from early 2023 bank collapses. These events have not only created longer-term liquidity concerns but also increased capital costs for private investment funds.

The landscape was further complicated by increased regulatory activity, generating uncertainty for limited partners (LPs) and general partners (GPs) alike. This uncertainty stems from various factors, including rulings from the Securities and Exchange Commission (SEC) and mandates related to Environmental, Social, and Governance (ESG) criteria, leading to increased scrutiny from regulators towards fund managers and investors.

Despite these challenges, the report identifies a few bright spots and pockets of opportunity that have generated optimism within the sector. Notably, the proliferation of carve-out and add-on deals has acted as a shock absorber for middle-market deal activity, helping to sustain momentum in the deal market despite significant headwinds. Furthermore, private credit has advanced its market share of M&A loan funding. As traditional lender sources have scaled back on debt funding, direct lending has stepped in to fill the financing gaps left by the pullback in syndicated debt financings.

The middle market, in particular, has shown resilience and outperformed other segments. Although not entirely immune from the stagnation affecting the deal-making world, the decline in the middle market was less acute compared to the broader M&A market. Additionally, the technology and professional services sectors have emerged as focal areas for private equity investment. Technology, especially with the growing segment of artificial intelligence (AI), accounted for nearly one-third of leveraged buyout activity. Meanwhile, professional services have garnered increasing interest from private equity investors, with particular emphasis on categories such as Certified Public Accountant (CPA) firms, wealth management, and consulting firms. This detailed landscape provides a comprehensive overview of the current state of M&A activity, highlighting the challenges, adaptations, and sectors of growth within the industry.

If you want to read the full report you can access the following link.

 

FlexFunds Strengthens its Team in Brazil and the United States

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Photo courtesyWilson Gomes & Carlos Andón.

FlexFunds announced the strengthening of its team with the appointments of Wilson Gomes and Carlos Andón.

“This solidifies FlexFunds’ position in the Brazilian financial market, from acquiring prominent local clients and placing Andón as the leader of its operational innovation project”, the firm said in a press released.

With over 20 years of experience in the Brazilian financial market, Wilson Gomes joins as Business Development Manager in Sao Paulo.

Gomes has held managerial roles in Bank of Boston, Bloomberg, and MarketAxess. With a degree in Business Administration from the Pontifícia Universidade Católica de São Paulo and postgraduate studies at UC Berkeley, “his deep knowledge of the local market and successful track record make him a valuable asset to the FlexFunds team”, the company added.

“The addition of Wilson will allow us to expand our growth horizons in the Brazilian market, adapting our solutions to the needs of local asset managers. We see significant potential for asset securitization through local sub-custody, driving the distribution of portfolio managers’ investment strategies,” said José Carlos González Navarro, CEO of FlexFunds.

FlexFunds’ solutions currently have Brazilian clients such as CIX Capital, Leste and Fortune Wealth Management, which have securitized more than $200 million in assets, the press release adds. Additionally, the company has recently launched a solution specifically developed for the Brazilian market, allowing the securitization of a portfolio of local assets through sub-custodians in Brazil.

Meanwhile, based in Miami, Carlos Andón is promoted as Director of Product Operations. A veteran of FlexFunds, Andón has played a crucial role in achieving the automation of key architecture, policies, and procedures for the firm. He has also overseen the establishment of trading lines with over 50 counterparts worldwide and coordinates the global notes program with over USD 1.5 billion in assets under service. Andón will lead the operational innovation project for client reporting and automating the pricing calculation of FlexFunds’ ETPs, according to the firm.

“Carlos’s appointment is a source of pride and reflects the worth of our team. His leadership will be essential to continue offering our clients a world-class asset securitization program, enabling them to expand the distribution of investment strategies cost-effectively,” stated Emilio Veiga Gil, Executive Vice President of FlexFunds.

 

 

 

Median Prices and New Listings on the Rise in Florida

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Florida’s real estate market started 2024 on the upswing: higher median prices, more new listings, more inventory (active listings) and year-over-year averages, according to the latest real estate data from Florida Realtors®.

However, mortgage interest rates above 6% continued to affect the buying power of potential homebuyers, while contributing to a lock-in effect among potential home sellers who purchased their homes years ago with a 3% to 4.5% mortgage rate.

“We are seeing positive signs that for-sale inventory is starting to increase in many local markets across the state, which should encourage buyers who may have been waiting on the sidelines,” said 2024 Florida Realtors® President Gia Arvin, broker-owner of Matchmaker Realty in Gainesville.

Closed sales of single-family homes statewide in January totaled 14,851, up 0.6% from the January 2023 level, while sales of existing condominiums and townhomes totaled 6,008*, up 1.2% year-over-year, according to data from Florida Realtors’ Research Department in collaboration with local Realtor boards/associations.

In January, the statewide median sales price for existing single-family homes was $405,000, up 3.8% from a year earlier; for condo and townhouse units, it was $320,000, up 3.2% from January 2023.

“While sales and prices remained fairly similar compared to a year ago, we saw significantly more new listings this January,” said Florida Realtors Chief Economist Brad O’Connor.

Amerant Investments Partners with iCapital

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Image Developed Using AI

Amerant Investments announced that it has entered into a strategic relationship with iCapital.

This collaboration will provide Amerant Investment’s financial advisors, along with their clients, access to private market opportunities and analytics. The partnership will also entail oversight of the entire investment and education experience through a unified technology platform and operating system, according the press release.

“At Amerant Investments, we recognize that private markets investments have the potential to generate higher returns and provide diversification benefits to investors as they seek to access relatively untapped opportunities,” said Sergio Guerrero, COO at Amerant Investments. “We are excited to leverage iCapital’s curated options, innovative technology, and robust educational materials to help set our financial advisors up for success.”

“Unicorn Strategic Partners, a key distribution partner to asset managers and a strategic ally to iCapital in the LATAM region, will play a crucial role in supporting Amerant’s distribution efforts. Additionally, they will educate Amerant’s network of advisors on the available asset classes and funds via iCapital Marketplace, a platform featuring the industry’s broadest selection of alternative investment funds, due diligence and education resources, fund subscription processing, and third-party reporting services”, the firm said.

The menu will focus on semi-liquid and closed-end funds available on iCapital Marketplace. iCapital’s market-leading technology platform and solutions have effectively and efficiently diminished the historical barriers that wealth managers and their clients have faced when investing in private markets by automating the subscription, administration, operational, and reporting processes for the life of the investment.

In addition, the partnership with iCapital provides Amerant with a full suite of research, due diligence, and educational materials to empower their financial advisors and investors. It will include access to iCapital’s comprehensive educational offerings, including the AltsEdgeTM Certificate Program, an educational initiative jointly created by iCapital and the Chartered Alternative Investment Analyst (CAIA) Association, designed to help wealth managers better understand alternative investments and how they can leverage them to improve client outcomes. The AltsEdgeTM program consists of ten research-based, CE-accredited modules covering the private markets, various types of strategies and product structures, and portfolio construction.

“Wealth managers are increasingly looking to alternative investments as a way to help their clients improve their financial outcomes,” said Wes Sturdevant, Managing Director, iCapital Enterprise Solutions. “We are proud to establish this partnership with Amerant Investments, a respected registered investment advisor and broker-dealer with wealth management expertise in the Latin America and U.S. markets and welcome the opportunity to support their expansion into alternative investments.”

Growth Beyond Megacaps: MFS’s Proposal for the IV Funds Society Investment Summit & Rodeo

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Photo courtesyScott T. Edgcomb, CFA, Director and Investment Product Specialist de MFS Investment Management

MFS will showcase its US Growth Equities strategy at the IV Funds Society Investment Summit & Rodeo, focusing on opportunities beyond the “magnificent seven.”

The event, set to take place on February 29th at the JW Marriott Houston by The Galleria, will feature Scott T. Edgcomb, CFA, Director, Investment Product Specialist at MFS, discussing viable and sustainable growth companies outside of the “magnificent seven.”

“While the media continuously talks about the Magnificent Seven as if they were a monolith, each of them is distinct in terms of earnings, cash flow, and valuation. After dominating performance in the early part of 2023, the performance of the Magnificent Seven was less striking for the remainder of the year,” states MFS’s strategy description.

The firm focuses “on earnings growth over full cycles and companies with exposure to strong secular growth trends, enduring competitive advantages, high barriers to entry, pricing power, and solid management teams,” it describes.

Moreover, they seek companies with a high degree of earnings visibility and a narrow range of possible earnings outcomes.

Edgcomb’s presentation will cover topics related to how artificial intelligence and technological advancement will lead to increased complexity in semiconductor design and manufacturing, and how labor productivity increases will more than offset wage inflation.

After the experts’ conferences, guests will be transported to the NRG Stadium to enjoy the Houston’s Livestock Show and Rodeo from the Funds Society’s private suite.

About Scott T. Edgcomb, CFA

He is a Director and Investment Product Specialist at MFS Investment Management. He is responsible for communicating investment policy, strategy, and tactics; conducting portfolio analysis; and leading product development.

Edgcomb joined MFS in 2011 as a customer service representative. He also served as a regional sales representative and senior investment product analyst before taking on his current role in 2018. He earned a bachelor’s degree in finance and management from Georgetown University. He holds the Chartered Financial Analyst (CFA) designation and is a member of the CFA Institute and the CFA Society of Boston.

LV Distribution and Crossmark Global Investments Forge Strategic Partnership

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Photo courtesy

LV Distribution announced a strategic partnership with Crossmark Global Investments. This collaboration marks a “pivotal moment in the financial services landscape, as LV Distribution takes a significant step towards expanding its offerings and providing exceptional investment solutions to Registered Investment Advisors (RIAs) and Family Offices,” the firm said.

Crossmark Global Investments, led by investment veteran Bob Doll, brings “a rich legacy of values-based investing expertise and an array of innovative investment products across mutual funds and SMAs in both traditional and liquid alternative asset classes,” the press released added.  With a shared commitment to excellence and client-centric solutions, both LV Distribution and Crossmark Global Investments aim to provide RIAs and Family Offices access to diversified, cutting-edge investment strategies.

“We are thrilled to partner with Crossmark Global Investments, an esteemed firm that shares our  goal of delivering exceptional investment solutions to clients that would like to invest alongside their values in addition to a wide array of uniquely positioned investment solutions ,” said Edward Soltys, Head of LV Distribution. “This collaboration represents a significant milestone for LV Distribution as we continue to enhance our offerings and provide the highest quality investment options for our valued clients.”

LV Distribution’s network, coupled with Crossmark Global Investments’ proven track record in managing investment products, creates a powerful alliance poised to serve the diverse needs of RIAs and Family Offices. The partnership will enable LV Distribution to offer Crossmark Global Investments’ suite of investment solutions, providing investors with access to innovative strategies designed to meet their unique financial objectives, adds the firm’s statement accessed by Funds Society.

“We are excited to join forces with LV Distribution to expand the reach of our investment products and services,” said Heather Lindsey, Managing Director, Head of Distribution at Crossmark Global Investments. “We have seen steady growth in demand for Crossmark’s investment capabilities over the past several years. LV Distribution’s expertise in third-party asset management distribution, combined with our investment capabilities, will enable us to reach a greater number of investors and advisors who are seeking to align their investments with their values.”

Both LV Distribution and Crossmark Global Investments are dedicated to fostering strong relationships and delivering outstanding investment experiences to clients. Through this partnership, the companies will further strengthen their commitment to helping investors achieve their financial objectives and driving long-term success in the ever-evolving financial landscape.