Financial Advisors Anticipate a Bull Market in 2025

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The vast majority of financial advisors expect the S&P 500 to rise by 10% or more by the end of 2025 compared to its level between November 6 and November 13, 2024, according to the InspereX Pulse 2025 Outlook Survey.

The study, which surveyed 682 U.S. advisors, found that 67% expect the S&P 500 to rise by 10%, 14% foresee a 20% increase, and 2% expect the S&P 500 to climb by more than 20%. Conversely, 10% believe the S&P 500 will remain stable, while 7% predict declines of at least 10%.

Meanwhile, 69% believe equities will be the best-performing asset class in 2025, with cryptocurrencies emerging as the second most attractive asset: 11% bet they will be the most profitable.

Although expectations for the year are optimistic, 80% of respondents anticipate a significant drop in the S&P 500 at some point during the year. Given these forecasts, 72% of advisors stated they are likely or definitely planning to add more downside protection strategies to client portfolios in 2025.

“Advisors are certainly bullish, but much of their optimism aligns more closely with historical averages. When we combine this with expectations of high volatility, including at least one correction or worse, it means investors will need to endure uncertainty to achieve returns that might be harder to secure,” said Chris Mee, Managing Director at InspereX.

The Fed and the Situation of the Economy in 2025

More than two-thirds (68%) of advisors expect the Federal Reserve to cut the federal funds rate two or three times in 2025. Only 10% foresee four or more cuts, while 5% expect the Fed to remain neutral. Just 2% anticipate one or more rate hikes.

As a result, 46% of advisors believe the Fed will achieve a soft landing, 25% anticipate a “no landing” scenario, 22% believe the Fed has already achieved a soft landing, and 7% expect a hard landing.

What Concerns Advisors the Most?

Regarding concerns, geopolitics tops the list for nearly a third of advisors (31%). Inflation is the second-most worrying issue for 27%. Additionally, 15% are troubled by market volatility, 11% are concerned about the new presidential administration, 8% worry about tax increases, and 8% focus on interest rate policy. Advisors noted that their clients are less worried about the macroeconomic outlook and tend to prioritize immediate risks, the study adds.

Under these analyses, 53% of advisors said they would not make strategic changes to client portfolios based on election outcomes, 24% said they would add downside protection as a result of the elections, 6% would adopt a more conservative approach, and 17% would take a more aggressive stance. When rating their clients’ anxiety on a scale from 1 to 10, advisors reported an average of 5.1. This suggests that end investors are not overly anxious about the country’s and markets’ outlook over the next 12 months, according to the study.

ETFs in the United States Received Over 120 Billion Dollars in Net Inflows

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The U.S. ETF industry increased its net inflows year-to-date in 2024 to a record $861.39 billion after gathering $120.58 billion in net inflows in October, according to ETFGI’s report for the tenth month of the year.

“The S&P 500 index fell by 0.91% in October but has risen 20.97% throughout 2024. The index of developed markets, excluding the U.S., dropped by 5.22% in October but increased by 6.65% in 2024,” commented Deborah Fuhr, managing partner, founder, and owner of ETFGI.

At the end of October, the U.S. ETF sector had 3,826 products, assets worth $9.98 trillion, from 348 providers listed on three exchanges.

Additionally, equity ETFs recorded net inflows of $62.36 billion in October, bringing year-to-date net inflows to $400.24 billion, significantly surpassing the $150.83 billion in net inflows during the same period in 2023.

On the fixed income side, ETFs recorded net inflows of $16.59 billion in October, raising year-to-date net inflows to $161.74 billion. These figures also exceed the $129.48 billion in year-to-date net inflows during the same period last year.

Commodities were no exception, as ETFs in this asset category recorded net inflows of $3.52 billion in October, bringing year-to-date net inflows to $3.51 billion, a stark contrast to the year-to-date net outflows of $9.21 billion as of October 2023.

Finally, the numbers continue to support the trend of active ETFs, which attracted net inflows of $32.7 billion during the month, bringing year-to-date net inflows to $239.37 billion, more than $100 billion above the $101.33 billion in net inflows during the same period in 2023.

Snowden Lane Partners Promotes Alex Bryer to Boost Recruitment in the U.S.

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Snowden Lane Partners Appoints Alex Bryer to Leadership Team to Drive Business Development and Recruitment Across the U.S., the Firm Announces

Snowden Lane Partners has named Alex Bryer a member of the firm’s leadership team, where he will take on a key role in national business development and recruitment in the U.S., according to the company’s statement.

While Bryer will retain his position as Senior Partner and Managing Director leading the firm’s Bethesda office, he will also work with Snowden Lane’s board in a national recruitment capacity. He will collaborate with the firm’s advisors and coordinate with external recruiters to identify and bring on board high-caliber financial advisory teams.

“Alex is an experienced and high-level leader at Snowden Lane who has already demonstrated his ability to recruit quality advisors and substantially grow his own practice,” said Greg Franks, Managing Partner, President, and COO of Snowden Lane.

Bryer’s appointment comes after the firm has added 13 financial advisors since September 2023, representing $1.8 billion in assets from new clients, the firm added.

Snowden Lane has reported 20% year-over-year revenue growth and has expanded its footprint by adding offices in Boca Raton, FL, Golden, CO, and Philadelphia, PA, the statement said.

Bryer joined Snowden Lane Partners in 2015 and has since built a highly successful practice, which includes six advisors currently managing over $1 billion in client assets.

Prior to joining Snowden Lane, Bryer spent 21 years at Merrill Lynch, where he served as a Resident Senior Director overseeing multiple offices in the Washington, D.C. area.

Masttro Launches a New Wealth Management Platform

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Masttro announced on Monday the launch of its next-generation platform, establishing a new benchmark for more streamlined and robust wealth data management.

“The platform update arrives at a time of rising global asset valuations and increased complexity in wealth portfolios, as more asset owners are acquiring illiquid alternative investments,” states the press release accessed by Funds Society.

Family offices and wealth managers tasked with record-keeping and reporting often have limited visibility into asset management and performance unless they undertake significant manual data aggregation efforts, the firm noted.

This challenge is “further compounded by the need to support the massive generational wealth transfer—estimated at $84 trillion over the next two decades—to more tech-savvy owners who expect interactive, real-time views of their total wealth at the push of a button,” Masttro added.

“Masttro is committed to continuous innovation and to delivering first-class technology that enables our clients to better serve their UHNW clients. Our AI-driven platform is saving family offices and wealth management institutions enormous time and effort by providing asset owners with a comprehensive understanding of their portfolios and total net worth,” said Padman Perumal, CEO of Masttro.

Masttro’s next-generation platform introduces a component-based architecture that combines AI-driven automation with user-centered design to meet the demands of modern wealth management.

Key features of the new platform include:

  • Aggregation of liquid and illiquid assets, liabilities, and passion investments into a single interactive dashboard.
  • Advanced document extraction and data aggregation that eliminate manual processes, saving time and effort.
  • An API that allows Masttro’s datasets to integrate seamlessly with other systems, creating an optimized wealth management ecosystem.
  • Intuitive controls that enable firms to customize the platform, strengthening client relationships with tailored experiences.

As the platform continues to roll out, additional enhancements and new modules are expected to launch in early 2025, the firm concluded in its statement.

BlackRock Launches Europe’s First Actively Managed Regulated Money Market ETF

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BlackRock has introduced the iShares € Cash UCITS ETF (YCSH), a new actively managed ETF offering investors a way to manage their cash investments through a product designed to deliver money market-like returns.

According to BlackRock, the ETF combines the quality and liquidity of regulated money market funds (MMFs) with the convenience of the ETF format. Leveraging the expertise of its global cash management team, the fund actively manages cash in varying interest rate environments within a robust risk management framework.

As a key portfolio component, the fund provides access to highly rated short-term money market instruments, adhering to the stringent guidelines of the European Money Market Fund Regulation (MMFR), while offering clients the flexibility to meet their liquidity needs.

BlackRock highlights that extending MMF regulatory standards to the ETF ecosystem should enable a broader range of investors to actively manage their cash. “This product can be used to maximize the return on cash held in savings accounts, ETFs, or trading accounts, as well as by investors seeking a diversified cash investment tool as a complement or alternative to a standard bank account,” the firm stated.

The ETF allows individual investors, including those using digital investment platforms, to earn income through high credit-quality securities without minimum holding periods, and with investments starting from as little as €1.

“The YCSH combines the flexibility and accessibility of the ETF format, including continuous pricing and the ability to trade throughout the day, with the security of money market fund regulation. It’s an innovative solution for investors looking to get more out of their cash. This year, Europeans have shown significant interest in income investments, and YCSH expands the available options without requiring a fixed investment period,” said Jane Sloan, Head of Global Product Solutions for EMEA at BlackRock.

A dedicated team of money market portfolio managers will actively adjust the fund’s duration, credit exposures, and liquidity profiles to minimize volatility and ensure issuer diversification.

Beccy Milchem, Global Head of Cash Distribution and Head of International Cash Management, added: “Cash plays a critical role in a balanced investment strategy. We are pleased to bring BlackRock’s extensive expertise in active cash management to a wider range of investors through the convenience of ETFs. The demand for money market funds has grown in today’s high-interest-rate environment as investors look to actively manage their cash positions.”

With $849 billion in global assets under management in money market strategies, BlackRock International Cash Management ranks among the top three providers of MMFs. For nearly 50 years, BlackRock has delivered a variety of liquidity solutions tailored to the unique needs of each client across multiple interest rate cycles and market conditions.

This launch combines BlackRock’s leading expertise in cash management with the breadth and scale of the global leader in ETFs. The fund will be listed on Xetra with a total expense ratio (TER) of 0.10%.

Trump Nominates Paul Atkins as New SEC Chair, Advocating for “Common-Sense Regulations”

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Wikimedia CommonsPaul Atkins

U.S. President-elect Donald Trump has nominated Paul Atkins to serve as the new Chair of the Securities and Exchange Commission (SEC), effective January 20, 2025.

“Paul is a proven leader who advocates for common-sense regulations. He believes in the promise of strong and innovative capital markets that address the needs of investors while providing the capital necessary to make our economy the best in the world,” Trump said in a statement on Wednesday.

The president-elect, set to take office on January 20, also emphasized that the incoming SEC Chair “recognizes that digital assets and other innovations are crucial to making America greater than ever.”

Atkins previously served as one of the SEC commissioners, appointed by George W. Bush in 2002, a role he held until 2008.

He is currently the CEO of Patomak Global Partners, a strategic consulting firm for major financial clients that he founded in 2008 after leaving the SEC. At Patomak, he advises banks, trading firms, and fintech companies, among others.

Industry insiders anticipate that Atkins’ tenure will focus on deregulation, contrasting with the years under Gary Gensler, who was known for his rigorous enforcement of regulations.

The nominated SEC Chair has expressed support for digital assets, a stance that aligns with the immediate rise in Bitcoin’s value following Trump’s announcement. Within just an hour of the news, the cryptocurrency rose 1.25%, surpassing the $97,000 mark.

Itaú and Gama Investimentos Launch U.S. Small-Cap Fund in Brazil

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Photo courtesyBernardo Queima, CEO of Gama Investimentos

Itaú Unibanco and Gama Investimentos announced a new partnership to introduce a U.S. small-cap equity fund to the Brazilian market, in collaboration with Portolan Capital Management.

Initially, the fund will be exclusively available to Itaú Private Bank clients, offering access to a unique and complementary investment strategy to the S&P 500.

The Portolan Equity Strategy Selection fund is hedged, protecting Brazilian investors from currency fluctuations. It focuses on companies with market values between $100 million and $3 billion, providing a diversified portfolio of approximately 100 companies. About two-thirds of the investments are directed toward high-conviction positions, while the remainder is allocated to new opportunities and capital recycling.

Bernardo Queima, CEO of Gama Investimentos, highlighted the strategy’s timely launch, given the attractive valuations of companies in the Russell 2000 index. “The current valuation differential is one of the largest in recent decades, comparable to periods like the Nifty Fifty and the dot-com bubble,” he stated.

The Portolan fund has achieved an accumulated return of 32.8% this year, outperforming the Russell 2000 benchmark, which posted a 20.5% gain, the firm added. The portfolio features standout sectors such as healthcare, communication, consumer goods, and technology.

In Europe, From January to October, ETFs Attracted $207.79 Billion, Surpassing the 2021 Record

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According to the latest report from ETFGI, an independent research firm, the ETF market is on track to break all records, as demonstrated by October’s flows. During the first ten months of the year, ETFs captured $207.79 billion, surpassing the record set in 2021 with inflows of $193.46 billion. In terms of leadership, the Xtrackers S&P 500 Equal Weight UCITS ETF (DR) – 1C (XDEW GY) gathered $1.73 billion, the largest individual net inflow.

“The S&P 500 index fell by 0.91% in October but rose by 20.97% in 2024. The developed markets index, excluding the U.S., dropped by 5.22% in October but rose by 6.65% year-to-date in 2024. The Netherlands (-10.20%) and Portugal (-8.24%) recorded the largest declines among developed markets in October. The emerging markets index fell by 3.78% in October but rose by 14.93% year-over-year in 2024. Greece (-8.66%) and Poland (-8.18%) experienced the largest declines among emerging markets in October,” highlighted Deborah Fuhr, managing partner, founder, and owner of ETFGI.

Regarding the behavior of flows in October alone, the report indicates that $31.55 billion in inflows were recorded. By asset type, equity ETFs attracted $22.42 billion, bringing year-to-date inflows to $144.69 billion, significantly above the same figure for 2023. In the case of fixed income, ETFs attracted $6.18 billion in October, with year-to-date net inflows reaching $53.12 billion, “slightly above the $51.63 billion in year-to-date net inflows in 2023,” according to the report.

In the case of commodity ETFs, these recorded inflows of $385.46 million in October, bringing year-to-date net outflows to $4.51 billion, below the $4.79 billion in year-to-date net outflows in 2023. “Active ETFs attracted net inflows of $2.68 billion during the month, bringing year-to-date net inflows to $14.66 billion, above the $6.19 billion in year-to-date net inflows in 2023,” it highlights.

A significant fact is that, by the end of October, the European ETF sector comprised 3,109 products, 12,744 listings, and $2.22 trillion in assets. These $2.22 trillion came from 105 providers listed on 29 exchanges in 24 countries.

 

2024: The Year of Gold

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As 2024 enters its final stretch, the international price of gold has risen by approximately 24% year-to-date (YTD), primarily driven by sustained demand from a specific group of central banks, according to a report by Credicorp Research authored by Daniel Velandia, CFA, and Diego Camacho Álvarez.

Record High Prices

By the end of October 2024, the international price of a troy ounce of gold temporarily surpassed $2,750, marking around nine months of sustained growth and a 30% YTD increase.

While this dynamic suggested an uninterrupted trend of new highs, experts pointed out that a more appropriate analysis would consider prices adjusted for inflation via the Consumer Price Index (CPI). Gold’s advocates as an investment and diversification asset emphasize its principal virtue as a true hedge against the monetary exuberance of the global economy.

When accounting for the inflation effect, the rise in gold prices throughout the year is significant but still falls short of a new historical high. Instead, in real terms, the price has recently reached a critical resistance level last observed in 1980 and 2011. Considering the international turmoil tied to persistent geopolitical tensions and, more recently, the results of the U.S. elections, this distinction is valuable for making portfolio diversification decisions.

The 2008 Crisis, Basel III, and Gold Demand

The implementation of the Basel III agreements has had a notable but often overlooked impact on gold prices. While the initiative aims to strengthen regulatory standards and curb risk-taking in the banking sector, it also seeks to limit speculation in derivative markets where gold serves as the underlying asset.

The 2008 financial crisis exposed vulnerabilities in the fractional banking system. In response, Basel III identified that investment funds, futures contracts, ETFs, and other instruments linked to gold—but not necessarily backed by physical gold—essentially replicate the speculative model based on fiat money. The new regulations aim to restrict or eliminate this practice.

Under Basel III, physical gold has been reclassified as a Tier 1 asset, reserved for the safest and most liquid assets, such as cash and high-quality government bonds. This represents a significant shift in how banks consider and manage gold on their balance sheets. Prior to Basel III, gold was classified as a Tier 3 asset, characterized by higher risk and lower liquidity. The new regulations also mandate financial institutions to maintain 85% capital buffers—up from 0%—to ensure the financing and clearing operations for precious metals.

The Net Stable Funding Ratio (NSFR), another key component of Basel III reforms, requires banks to maintain a balance between long-term assets and liabilities to ensure financial stability. Regarding gold, the NSFR makes a critical distinction between physical gold and gold-backed instruments like paper gold. According to these rules, derivative-based assets can only be weighted at 85% of their market value for NSFR purposes. This classification deems these instruments less secure and less liquid than physical gold, encouraging banks to reduce exposure to derivatives and increase reliance on physical gold to strengthen their balance sheets.

This differentiation between physical gold and gold derivatives has profound implications for the market, fostering a shift toward greater use of gold as a secure and liquid asset in financial systems.

Geopolitics and Reserve Assets

According to data from the World Gold Council (WGC), central bank demand is a key driver of the strong advance in gold prices. While some central banks seek alternatives to minimize the impact of U.S. economic sanctions, others argue that, amid the fiscal and monetary challenges faced by developed economies, gold remains one of the world’s most important reserve assets.

In both cases, the war in Ukraine has played a decisive role. Between 2010 and 2021, annual central bank demand averaged 470 tons. In 2022, this figure rose to 1,082 tons, followed by 1,030 tons in 2023. In the first nine months of 2024, demand reached 694 tons. Analyzing this dynamic requires precision regarding the data structure and consideration of the varied motivations among central banks.

Russia and China Lead the BRICs

Central banks in Russia and China, along with authorities in Saudi Arabia and several sovereign wealth funds (SWFs), top the list of institutional buyers involved in undisclosed gold purchases. According to WGC data, by Q3 2024, Russia held 2,335 tons of gold, an increase of 1,913 tons since Q3 2000. Relative to the size of its economy, Russia has the largest gold reserves. China, meanwhile, is estimated to hold 2,264 tons, up from 395 tons in 2000. Given their strategic competition with the U.S., both nations are expected to remain regular gold buyers, albeit without disclosing full information.

The Visegrad Group and Central Europe

The Visegrad Group, comprising Czech Republic, Hungary, Poland, and Slovakia, collaborates on shared interests within European integration. Specifically, Poland, Hungary, and the Czech Republic have been increasing their gold reserves. This accumulation is seen as a strategic measure against economic uncertainty, for value preservation, diversification, and to address rising geopolitical risks.

Among these, Poland stands out for its expanded production capacity and emergence as a strategic regional player. Polish authorities have significantly increased defense spending, with analysts suggesting that Poland is poised to develop one of Europe’s most dynamic economies, robust military forces, and strong gold-centered international reserves. Poland now holds 377 tons of gold, surpassing Saudi Arabia (323 tons) and the United Kingdom (310 tons).

Other Players

While major European economies have been net sellers of gold this century, nations like Turkey, India, and several Central Asian countries (former Soviet states) have publicly announced intentions to increase their gold holdings. Turkey holds 595 tons, while India’s reserves are estimated at 854 tons.

Central Bank Survey and Final Considerations

The latest central bank survey conducted by the WGC indicates growing recognition of gold’s monetary characteristics in discussions on international reserve consolidation. While respondents expect moderate increases in gold reserves over the next five years, this is not seen as a complete replacement of the U.S. dollar as the global system’s anchor.

In conclusion, the complexity of today’s international landscape and the emergence of new economic blocs will sustain demand for gold as a reserve asset. However, investors should be cautious of market risks following this year’s significant appreciation. For those with suitable risk profiles, potential price corrections could provide opportunities for portfolio diversification.

The SEC Announces the Departure of Its Chair Gary Gensler

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The Securities and Exchange Commission (SEC) announced that its Chair, Gary Gensler, will step down on January 20, 2025. Gensler began his term on April 17, 2021, immediately following the GameStop market events, and “led the agency through a robust regulatory agenda to enhance the efficiency, resilience, and integrity of U.S. capital markets,” the SEC stated in its announcement.

During his tenure, Gensler oversaw high-profile cases to hold violators accountable and return billions to harmed investors, the regulator added. “The SEC is an extraordinary agency. Its staff and the Commission are singularly focused on protecting investors, facilitating capital formation, and ensuring markets work for both investors and issuers. The staff are true public servants. It has been an honor to work with them on behalf of everyday Americans to ensure that our capital markets remain the best in the world,” said Gensler.

Treasury Markets

The SEC highlighted key achievements during Gensler’s leadership, including fundamental improvements in the $28 trillion U.S. Treasury markets. To reduce costs and risks, the SEC implemented rules to promote central clearing and limit exemptions for intermediaries from registering with the national securities association. These reforms aim to lower risk and increase efficiency across U.S. capital markets.

Equity Markets

Under Gensler, the SEC introduced the first significant updates to the $55 trillion U.S. equity markets in nearly 20 years. These updates included modernizing the National Market System, enabling tighter spreads and lower fees for more efficient trading. Other improvements included reducing the settlement cycle to one day, benefiting investors by reducing market risk. Additionally, the SEC updated intermediary execution quality reporting requirements, making equity markets more efficient for investors.

Resilience

The SEC adopted changes to Form PF, the confidential reporting form for certain private fund investment advisers registered with the SEC. The revised rules require large hedge fund and private equity fund advisers to file timely updates on specific events.

In collaboration with the Commodity Futures Trading Commission (CFTC), the SEC also amended Form PF to enhance the quality of information received from all filers. These changes, effective next year, aim to improve regulatory oversight. The SEC also reformed money market fund regulations, making these funds more resilient, liquid, and transparent, even during periods of stress.

Corporate Governance

To boost trust in capital markets, the SEC introduced corporate governance reforms under Gensler’s leadership. These included updates on insider trading rules, executive clawback provisions tied to erroneous financial statements, and enhanced disclosure of executive compensation relative to performance.

The agency also adopted rules enabling shareholders to vote for their preferred board candidates using universal proxy cards in contested director elections. Additionally, the SEC implemented rules requiring timely disclosures from entities acquiring more than a 5% stake in a company.

Enforcement and Compliance

The SEC’s Divisions of Enforcement and Examinations, comprising about half the agency, remained active during Gensler’s tenure. The SEC received over 145,000 tips, complaints, and referrals and awarded approximately $1.5 billion to whistleblowers. It initiated more than 2,700 enforcement actions, resulting in $21 billion in penalties and disgorgement orders. Between fiscal years 2021 and 2024, the agency returned more than $2.7 billion to harmed investors.

Through inspections of investment advisers, funds, and broker-dealers, the SEC recovered over $250 million for investors. The Division of Examinations also improved communication with registrants, sharing timely priorities and observations while collaborating proactively with industry participants and other regulators.

Under Gensler, the SEC continued Jay Clayton’s work to protect cryptocurrency investors. During his term, the agency took action against crypto intermediaries for fraud, wash trading, registration violations, and other misconduct. In its most recent fiscal year, 18% of SEC tips, complaints, and referrals were related to cryptocurrencies, even though these markets represent less than 1% of U.S. capital markets. Courts consistently upheld the SEC’s authority to enforce securities laws, regardless of the form of the securities being offered, the statement concluded.