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Tax Structure: The Factor Gaining Weight Among Global Citizens Evaluating Relocation

Global Citizen Solutions (GCS), the international firm specializing in residency and citizenship planning consultancy, has published a new report prepared by its research department, the Global Intelligence Unit (GIU), titled Tax Optimization for Global Citizens, a comparative study of tax positions across 48 jurisdictions for internationally mobile individuals. The report evaluates each jurisdiction based on 11 indicators grouped into three pillars (Tax Burden, Tax Structure, and Investment Migration, with weightings of 42.5%, 42.5%, and 15% respectively), under the premise that how a tax system treats foreign income and departing residents matters just as much as the nominal rate it charges.

The United Arab Emirates leads the overall ranking by combining a 0% personal income tax rate with a 5% consumption tax and no charges at the time of departure. Antigua and Barbuda, Paraguay, Hong Kong, and the Bahamas complete the top five. Malta and Cyprus are the only two European jurisdictions to enter the top ten, doing so through preferential regimes rather than low nominal rates.

Tax Optimization Chart for Global Citizens. Source: Global Intelligence Unit in its report “Tax Optimization for Global Citizens”

Tax Structure Weighs Heavier Than the Nominal Rate

The central finding of the report is that a jurisdiction’s tax rate and the structure of its tax system are largely independent of one another. Uruguay charges 36%, a rate closer to Western Europe than the Caribbean, yet records the highest Tax Structure score in the entire sample, placing twelfth overall exclusively due to that structure. Hungary, by contrast, charges 15% but ranks 31st because it taxes its tax residents on worldwide income and offers no substantial relief to newcomers.

Two mechanisms explain a high score in Tax Structure: a tax base that never reaches foreign income, as in Uruguay, Panama, and Hong Kong, or that only reaches it upon remittance, as in Malta and Mauritius; and a preferential regime superimposed on a system that otherwise taxes worldwide income, as in Cyprus, Portugal, and Italy.

“The countries that break the dilemma between taxes and quality of life—among them Malta, Cyprus, Uruguay, Costa Rica, Mauritius, Switzerland, and Portugal—do not achieve this by charging zero taxes. They manage it by taxing on a territorial or remittance basis, or through a well-designed preferential regime, leaving room to fund the public services that quality of life depends on. That is the true decision facing anyone who relocates: it is not simply about the lowest tax rate, but how foreign income is treated, whether through automatic exemption, partial relief, or more targeted exceptions, and how much certainty that structure actually offers,” comments Artur Saraiva, Founder and COO of Global Citizen Solutions.

Living Well, Departing Well

The report’s two structural findings point in opposite directions. Jurisdictions charging fewer taxes tend to rank lower in quality of life, meaning that what a resident saves in taxes is weighed against what they sacrifice in daily life. Thirty-one of the 48 jurisdictions in the study impose no exit tax, including all jurisdictions in Latin America and the Caribbean, so a lower cost of living rarely comes accompanied by a lower cost of departure, and a higher cost of living does not guarantee an easier exit either.

Seven jurisdictions break this quality-of-life pattern by combining a tax position in the top half of the table with a spot among the world’s top 50 in quality of life: Malta, Cyprus, Uruguay, Costa Rica, Mauritius, Switzerland, and Portugal. None achieves this by charging zero income tax. Each instead utilizes a territorial, remittance, or preferential regime structure that leaves room to fund the public services upon which quality of life relies. Regarding departure, eleven of the seventeen jurisdictions that do charge upon departure—including Australia, Canada, Denmark, Germany, Norway, Spain, and Switzerland—apply a broad charge with the possibility of deferral, while five, including Portugal, the United Kingdom, and Japan, apply a more limited version. The United States concentrates the highest tax burden in the entire sample, both by rate and by structure, while also imposing the most demanding departure conditions of all analyzed jurisdictions: deferral is only available against collateral acceptable to the U.S. Treasury, only if the expatriate permanently waives treaty protections, and only with interest that accrues until the tax is paid.

Death, Taxes, and Exceptions

Inheritance tax separates higher-burden systems from the index leaders more clearly than any other metric. France charges up to 60%, Japan 55%, and Germany 50%, whereas none of the thirteen leading jurisdictions in the index levy an inheritance tax. The report also highlights the United States as an outlier: since it taxes its citizens on their worldwide income regardless of where they live, relocating alone does not end a U.S. citizen’s tax obligations.

Highest Percentage Inheritance Tax Chart. Source: Global Intelligence Unit in its report “Tax Optimization for Global Citizens”

Net Wealth Tax, a Rarity

Net wealth tax applies in only eight of the 48 jurisdictions in the sample, with rates ranging from 0.1% in Uruguay to 3.5% in Spain. None of the jurisdictions that do not levy personal income tax apply a wealth tax either, meaning the absence of an income tax and the absence of a wealth tax usually go hand in hand rather than offsetting each other.

The report concludes that no single jurisdiction fits every profile. Entrepreneurs approaching a liquidity event are guided by the treatment of capital gains and the cost of departure; retirees, by inheritance, healthcare, and consumption taxes; and remote professionals, almost exclusively, by the tax base applied to foreign-source income. The full report presents specific lists for each of these profiles across the 48 analyzed jurisdictions.

What Fees Are Associated with Active Management?

| By Amaya Uriarte | 0 Comentarios

Choosing an actively managed fund involves paying for the work of a team that selects assets with the goal of outperforming its benchmark index. That service comes at a price, and understanding its components is key: costs directly reduce the return the investor receives, year after year.

Management fees are the most well-known charge. They are expressed as an annual percentage of the fund’s assets and compensate the manager and their research team. Investors do not pay them explicitly: they are deducted daily from the share value, so they are rarely perceived as an out-of-pocket expense. The amount varies depending on the asset class and strategy. Specialized equity or emerging market funds tend to sit at the higher end of the range, while fixed income funds are usually cheaper.

Performance fees. Some funds, especially alternative ones, also charge a fee tied to performance, subject to the product’s terms. Among the mechanisms that can protect the investor are the hurdle rate, which must be surpassed before charging, and the high-water mark, which prevents charging again for recovering previous losses within the established reference period. Not all funds incorporate both mechanisms. This fee aims to align the manager’s interests with those of the client, although it can also incentivize taking on more risk.

Subscription, Redemption, and Distribution Fees

Some management companies charge a percentage when entering or exiting the fund. It is a one-off charge, which many share classes eliminate, especially those aimed at institutional clients.

It is also worth distinguishing distribution costs. A portion of the management fee is often allocated to the bank, platform, or advisor marketing the fund through rebates or trailer fees. Transparency rules vary by jurisdiction, so it is worth asking how much of what is paid goes toward compensating distribution.

Transaction Costs and Other Expenses

Every time the manager buys or sells an asset, the fund absorbs brokerage fees, bid-ask spreads, and transaction taxes. Higher portfolio turnover generally means higher costs. In many markets, these expenses are reported separately from the expense ratio, so investors must look for them in the documentation. Added to these are custody, administration, audit, and legal advisory expenses.

How to Compare Them

The most widely used benchmark is the total expense ratio, known as the TER. The ongoing charges figure is also used, although both may include different concepts, especially regarding performance fees. They summarize much of the annual charges, but not all the costs of investing. It is advisable to check what each metric includes in the fund documentation.

To gauge its impact, a simple example: a $100,000 investment with a gross return of 6% annually over 20 years. Assuming constant returns and costs and reinvestment of earnings, excluding taxes, with an annual cost of 1.5%, the net return would be 4.5% and the final capital would be around $241,000. With a cost of 0.2%, the net would be 5.8% and the result close to $309,000. The difference, of about $67,000, illustrates how a percentage that seems small compounds over time.

This does not mean active management fails to justify its price. The relevant question is whether the manager’s added value, measured after fees and against its benchmark index and comparable funds, compensates for the additional cost. Knowing each component enables the investor to ask that question with sound judgment and make better-informed choices.

Besides Buffett, Who Are the Other “Legends” of the Investment World?

| By Amaya Uriarte | 0 Comentarios

The legendary Warren Buffett has stepped away from the day-to-day operations of Berkshire and, in a way, the markets have been left without a touchstone that accompanied them for years; however, the financial industry has many other figures who transformed the understanding of risk, value, markets, and wealth creation.

Now that Berkshire Hathaway has formally entered a new phase—Buffett was named Chairman Emeritus on September 18 and Greg Abel remains CEO—an inevitable question arises: who are the other figures who have built schools of investing capable of transcending their own results? The answer lies not in searching for another Buffett.

In fact, perhaps that is the primary lesson: the investment world does not have a single formula, it has different schools of thought: value investing, macro investing, credit, quantitative analysis, growth, corporate activism, and global stock selection.

Some of these figures managed funds for decades; others built institutions; some retired years ago, while others continue to actively participate in the markets. But all of them left behind something more than a profit-and-loss statement: a way of thinking that continues to be studied by professional investors. These are some of those other legends.

Peter Lynch: Finding Opportunities Where Others Are Not Looking

If Buffett turned value investing into an almost universal philosophy, Peter Lynch did something different: he enabled millions of everyday investors to understand that daily observation could also become an analytical tool. Lynch directed Fidelity’s Magellan Fund between 1977 and 1990. During those 13 years, the fund achieved an average annual return of 29.2%, compared to 15.8% for the S&P 500, according to Wharton. His philosophy was condensed into a phrase that became part of market vocabulary: “invest in what you know.”

However, reducing Lynch to that phrase would oversimplify his method. Behind the idea was a discipline of research: observing companies, understanding their businesses, identifying growth opportunities, and subsequently analyzing their financials. Lynch retired from Magellan in 1990 at just 46 years old. Since then, he has become one of the great advocates for equity investing. His legacy is perhaps particularly relevant in an era dominated by algorithms, artificial intelligence, and large quantitative models: before buying a stock, one must understand what the company does.

Howard Marks: The Investor Who Placed Risk Center Stage

There are investors known for their returns. Howard Marks belongs to a different category: he is also known for how he thinks and writes about risk. Marks co-founded Oaktree Capital Management in 1995, after developing years of expertise in high-yield bonds, distressed debt, and convertibles.

He currently continues as Co-Chairman of Oaktree, but his influence extends beyond asset management. His memos to investors became reference texts within the professional community, and books like The Most Important Thing popularized an idea that sounds simple, yet proves extraordinarily difficult to execute: investing is not solely about seeking returns, it is about understanding what risks are being assumed to achieve them. Oaktree’s own philosophy summarizes much of his legacy: an opportunistic, value-oriented approach with risk control, particularly developed in credit markets. Marks represents, in a sense, the other side of Buffett: while Buffett built much of his reputation around buying extraordinary businesses and holding them for a long time, Marks made moments of financial stress and misperceptions of risk a realm of opportunity.

Seth Klarman: Waiting Is Also an Investment Decision

Seth Klarman is another direct heir to the tradition of Benjamin Graham, but he expanded the concept of margin of safety into broader territories. He is the CEO and Portfolio Manager of The Baupost Group, a firm he founded in 1982 and whose investments he has supervised ever since. Baupost applies a value discipline with a tilt toward special situations, including public and private equities, distressed debt, bankruptcies, and real estate.

His book Margin of Safety, originally published in 1991, became one of the most sought-after texts by those who study value investing. Klarman’s teaching has a characteristic that is particularly uncomfortable for today’s markets: not investing can also be an investment decision. When prices do not offer a sufficient margin of safety, capital can remain in cash until an opportunity appears. In an industry accustomed to measuring success by the amount of assets deployed and manager activity, that patience is almost a provocation.

Stanley Druckenmiller: When Conviction Outweighs the Label

Druckenmiller belongs to an entirely different school. He did not build his reputation buying undervalued companies to hold them for decades. His domain was macro investing: interest rates, currencies, economic cycles, monetary policy, and major market moves.

At the helm of Duquesne Capital Management, he generated approximately 30% annualized returns between 1981 and 2010 and did not record a single losing year, according to Morgan Stanley. But perhaps the most interesting aspect of Druckenmiller is not the figure, but his mindset.

In a recent conversation with Morgan Stanley, he explained that he does not consider being a contrarian a virtue in itself. The market can be right many times; what matters, in his experience, is recognizing those moments when there is strong enough conviction to step away from the crowd.

After closing Duquesne Capital in 2010, he continued managing his wealth through his family office. Druckenmiller represents a lesson different from Buffett’s: not all great investments require decades to mature; some require correctly identifying a regime change and having the conviction to act.

Ray Dalio: Turning a Philosophy into a System

Ray Dalio achieved something few investors accomplish: he transformed a personal philosophy into an institution. He founded Bridgewater Associates in 1975 out of a two-bedroom apartment in New York and turned it, over the decades, into one of the largest alternative investment firms in the world. Dalio stepped down as CEO in 2017, as CIO in 2020, and as Chairman in 2021; he currently focuses primarily on passing down the principles developed throughout his career. His most famous contribution to the investment world is the All Weather concept and the development of risk parity strategies, alongside an investment architecture based on diversification across stocks, bonds, currencies, and commodities.

Yet his major conceptual contribution perhaps lies elsewhere: the obsession with turning investment decisions into repeatable processes. Bridgewater developed systems that combine historical research, algorithms, backtesting, and human judgment. The idea is simple: if economic cycles repeat with specific characteristics, studying the past allows one to build rules to navigate future scenarios. Dalio thus turned manager experience into something akin to decision engineering.

Cliff Asness: Where Wall Street Meets Academia

If Buffett represents business-based investing and Marks the reading of risk, Cliff Asness represents another revolution: quantitative investing based on statistical evidence. Asness founded AQR Capital Management alongside David Kabiller, Robert Krail, and John Liew in 1998. He had previously served as Director of Quantitative Research at Goldman Sachs. His career is deeply tied to academic research on factors such as value, momentum, quality, and other sources of return.

AQR was born precisely at that intersection of economics, behavioral finance, data, and technology. Asness has also defended an idea that is especially important in the era of artificial intelligence: a good backtest is not enough. In an interview published by the Journal of Portfolio Management, he explained that the challenge consists of finding strategies supported by both statistical evidence and a coherent economic rationale. Otherwise, the model may end up capturing simple historical noise. His legacy is, in essence, a question: what happens when a manager’s intuition can be converted into data, rules, and testable processes?

Bill Ackman: The Shareholder Who Does Not Sit Still

William Ackman belongs to another tradition: shareholder activism. He founded Pershing Square Capital Management in 2004 and built a strategy concentrated on a relatively small number of companies. Pershing Square notes that it typically holds between eight and 12 core positions, fundamentally in large North American public companies.

The philosophy differs from conventional diversification: select a few high-quality businesses, study them deeply, and, when necessary, use the equity stake to drive operational, financial, or corporate governance changes. Pershing Square’s track record is also part of the conversation. Its corporate documentation reports that from 2004 through December 2025, the Pershing Square, L.P. fund achieved a cumulative compound annual return that materially outperformed the S&P 500 over that period, net of fees.

Ackman represents an evolution of the investor’s role: not just allocating capital, but attempting to alter the path of the company in which one invests. It is a philosophy that can produce massive successes and also significant controversy, precisely because the manager ceases to be a passive shareholder and becomes an active participant in corporate strategy.

John Templeton: Buying When the World Wants to Sell

If one had to select one of the great pioneers of global investing, it would be difficult not to mention Sir John Templeton. Templeton began his Wall Street career in 1938 and created the Templeton Growth Fund in 1954, one of the first major global investment vehicles. His philosophy consisted of searching for opportunities where pessimism had driven prices to extreme levels.

His first major trade is almost a parable of value investing: when World War II began, he borrowed money to buy 100 shares in 104 companies trading at one dollar or less. Of those 104 companies, 34 were in bankruptcy; only four turned out to be complete losses. The result of that philosophy became legend. According to the John Templeton Foundation, a $10,000 investment in the Templeton Growth Fund at inception, with dividends reinvested, would have reached approximately $2 million by 1992, when Templeton sold the fund family to Franklin Group.

His legacy is especially interesting today, when investors tend to concentrate on specific countries, sectors, and companies. Templeton taught that the best opportunities are not always where enthusiasm lies, but where price reflects a pessimism that may be exaggerated.

Schools Outlast Their Masters

Taken together, this gallery explains something important about Buffett’s departure from leading Berkshire: There is no single intellectual successor. Lynch taught how to look at companies through everyday life. Marks put risk at the center of the conversation. Klarman took the margin of safety to its ultimate conclusions. Druckenmiller demonstrated the power of macro investing and conviction. Dalio turned diversification and risk management into a system. Asness shifted investing toward data and quantitative research. Ackman transformed the shareholder into an agent of corporate change. Templeton made global pessimism a source of opportunity.

These are different and even, in some cases, contradictory philosophies, but that is precisely why they remain relevant. In truth, everything indicates that the investment industry is not entering a post-Buffett era, but rather a stage where Buffett’s influence coexists with many other ways to understand how capital is created and protected. Perhaps that is the true legacy of investment legends: not leaving behind a formula to copy, but demonstrating that behind extraordinary returns, there is usually a distinct—and disciplined—way of thinking.

Buffett will continue to be part of that story from Berkshire, now as Chairman Emeritus and Director. But while his seat changes occupants, the various schools that helped build modern investing remain active. And the markets, as always, will continue to put each of them to the test.

Wall Street Turns Wealth Management into a Growth Engine: Citi and JPMorgan Attract Billions of Dollars

| By Amaya Uriarte | 0 Comentarios

The management of client wealth is gaining significant weight in the financial results of Wall Street’s major banks. In a quarter marked by market volatility, high interest rates, and uneven investment banking activity, Citigroup, JPMorgan Chase, Goldman Sachs, and Wells Fargo reported progress in their businesses linked to asset management, financial advisory, and wealth management services.

The financial results published this Tuesday offer various signals regarding the industry’s evolution. For instance, Citi registered a 15% growth in revenue within its Wealth division alongside a 93% surge in net income; JPMorgan reported $5.2 trillion in assets under management across its Asset & Wealth Management business; Goldman Sachs raised its revenues from management fees and incentives, while Wells Fargo saw gains in both client assets and advisory revenues.

Beyond the differences in their respective business models, all four banks demonstrate how building relationships with clients and their wealth can serve as a revenue engine combining fees, interest on deposits and loans, and investment services. The figures also reveal that not all growth stems from new client contributions: market movements and portfolio valuations heavily influence the volume of total assets managed.

Citi Accelerates the Profitability of Its Wealth Business

The case of Citigroup stands out due to the combination of revenue growth, asset gathering, and improved profitability. The Wealth division generated $3.269 billion in revenue in the third quarter, a 15% increase compared to the same period in 2025. Net income reached $585 million, up 93% year-over-year, while client investment assets grew 15% to $759 billion.

The bank also reported net investment asset inflows of $38 billion, doubling the $19 billion recorded a year earlier. Positive performance extended across all three areas comprising the business: Citigold and retail wealth banking, Private Bank, and Wealth at Work, which caters to workplace- and corporate-related wealth management needs.

Wealth net interest income increased 20% to approximately $2.3 billion, while non-interest revenue grew 5%. This trend underscores the continued importance of deposits and lending alongside investment service fees in Citi’s wealth model.

This momentum occurred alongside an improvement in the institution’s overall results. Citi reported total revenue of $23.845 billion and a net income of $5.245 billion, compared to $3.752 billion in the third quarter of last year. However, comparing consolidated net profits requires noting that the 2025 results included a goodwill impairment charge related to Banamex operations. Excluding that extraordinary item, the bank’s profit increased by approximately 16%, rather than 40%.

The trajectory of the Wealth segment is key to the strategy led by Jane Fraser, Citi’s Chair and CEO, who seeks to boost returns and reinforce business lines with higher growth potential. The firm noted that the return on capital for Wealth exceeded 14% during the quarter, well above the previous year’s level.

Based on the data provided in its latest financial report, it is evident that Citi is not merely capturing assets, but actively translating the expansion of its wealth franchise into top-line revenue and bottom-line profitability. Combining private banking, investment services, and custom financing enables the firm to diversify revenue streams while deepening relationships with high-net-worth clients.

JPMorgan Highlights the Scale of Asset Gathering

JPMorgan Chase offers another perspective on business expansion: the sheer scale of its platform. Its Asset & Wealth Management division reported $5.2 trillion in assets under management, up 13% year-over-year, while total client assets reached $7.9 trillion, representing a 15% annual increase.

Division revenues rose to $6.909 billion, up 14% from the third quarter of 2025, with net income reaching $1.843 billion, an 11% increase. The bank also reported net client inflows of $263 billion during the quarter—a figure notable for its sheer magnitude that highlights the platform’s capacity to attract capital.

The expansion of these business lines coexists with robust performance in other parts of the firm. JPMorgan recorded managed revenue of $50.9 billion and a reported net income of $15.3 billion. Nonetheless, overall results were somewhat tempered by investment securities losses and softer performance in select investment banking segments.

The scale of its wealth operations demonstrates the structural competitive edge that major banking platforms can build: unifying institutional asset management, private family and individual advisory, specialized investment products, and credit facilities. Within this framework, scale aids in diversifying revenue sources while amortizing technology, research, distribution, and regulatory compliance costs across a broad client base.

For the asset management industry, JPMorgan’s growth is also significant because its division encompasses activities beyond traditional private banking. Consequently, the $5.2 trillion figure under management should not be interpreted as capital strictly belonging to high-net-worth individuals, nor as funds deployed exclusively within mutual fund products.

Goldman Sachs Capitalizes on Fee Growth

Goldman Sachs provides a more direct reading of the relationship between capital markets and asset management. Its Asset & Wealth Management division reported revenue of $5.051 billion, a 14% increase year-over-year, while assets under supervision reached $4.097 trillion, reflecting a 19% annual jump.

One of the most notable highlights occurred in management and other fees, which totaled $3.587 billion, up 22% compared to the third quarter of 2025. Incentive fees rose to $587 million from $76 million a year earlier, driven by investment fund distributions.

These incentive payouts are particularly relevant because they illustrate how investment monetization fluctuates depending on asset performance and fund lifecycles. When managed vehicles execute exits or realizations, managers can capture significant fee income; however, this variable component does not necessarily recur with equal intensity in subsequent quarters.

Goldman Sachs also recorded $97 billion in net long-term asset inflows across equity, fixed income, and alternative strategies. Total divisional inflows, including liquidity products, came in at $83 billion, as liquidity vehicles registered $14 billion in net outflows.

Alternative assets reached $491 billion under supervision. This segment merits attention as it covers strategies outside traditional stock and bond portfolios, forming a key pillar of product offerings for institutional and private wealth clients.

Across the broader firm, Goldman Sachs posted quarterly revenue of $18.679 billion and net income of $5.290 billion, driven heavily by equity trading. The simultaneous growth in markets and Asset & Wealth Management illustrates two distinct revenue drivers: market operations, which fluctuate with volume and volatility, and management fees tied to recurring asset balances and fund performance.

Wells Fargo Confirms Momentum in Advisory Services

Wells Fargo completes the picture with a model where wealth management coexists alongside an expansive retail and commercial banking customer footprint. Its Wealth & Investment Management division posted revenue of $4.104 billion, a 12% annual increase, as client assets expanded 11% to $2.45 trillion.

Investment advisory and other asset-based fees reached $2.706 billion, up 15% year-over-year. Segment net income came in at $603 million, marking a 19% increase.

These figures show that the expansion of wealth management services is not restricted to institutions historically dominant in private banking or capital markets. Growth can also be driven by extensive branch networks, long-standing client relationships, and integrated offerings that combine investments, advice, and credit.

In consolidated terms, Wells Fargo reported a net income of $5.950 billion on total revenue of $21.870 billion. Profit growth occurred even as top-line revenue came in below market expectations, amid ongoing pressure on net interest margins and weaker trading activity in certain desks.

Asset Gathering Matters, but So Does Monetization

Taken together, these quarterly reports show that wealth management relies on multiple growth levers: first, capturing net new money; second, market appreciation as portfolio valuations rise; and third, generating multi-layer revenue via management fees, advisory services, deposits, and lending.

Distinguishing between these levers is critical because a rise in total assets under management does not automatically mean an influx of new client capital. Market fluctuations can expand or contract portfolio values, whereas net organic inflows provide a clearer measure of client adoption and franchise strength.

Differences in reporting metrics across institutions should also be taken into account. Citi groups wealth retail banking, private banking, and professional corporate accounts; JPMorgan combines institutional asset management with private wealth advisory; Goldman Sachs incorporates a large institutional and alternatives platform; and Wells Fargo blends traditional brokerage and investment advisory into its wealth division.

While these revenue and asset metrics do not form a strictly uniform comparison across fund managers, they clearly illustrate that Wall Street’s largest institutions are leveraging core client relationships to expand their investment franchises and diversify earnings.

Nevertheless, headwinds remain. Executive leadership across the major banks cautioned about persistent inflation, elevated interest rates, and macroeconomic and geopolitical uncertainty. These factors continue to impact funding and deposit costs, capital markets activity, asset valuations, and corporate or household investment decisions.

The key takeaway for the financial industry is that wealth management has evolved into a strategic centerpiece for Wall Street’s largest banks. Yet sustainable growth relies as much on attracting and retaining clients as it does on favorable market cycles and the quality of fee income generated by those portfolios. Citi stands out for its accelerated wealth profitability; JPMorgan for its structural scale and net inflows; Goldman Sachs for fee expansion; and Wells Fargo for sustained momentum in advisory services.

For asset managers and investment firms, the message is plain: client wealth represents not just an asset base, but a long-term financial relationship whose profitability increasingly depends on integrating investments, advisory solutions, and end-to-end services.

Crypto ETFs “Normalize Digital Assets”

| By Amaya Uriarte | 0 Comentarios

The growing use of cryptoasset ETPs is normalizing the inclusion of digital assets within standard portfolio allocations, according to a new global study by Nickel Digital Asset Management (Nickel), a European leader in digital asset hedge fund management based in London and founded by former executives from Bankers Trust, Goldman Sachs, and JPMorgan. The research, conducted among more than 200 senior executives from institutional investors and wealth managers, reveals that 84% agree that the rise in the use of cryptoasset ETPs will normalize digital assets in allocation models within three years, with 26% showing strong agreement with this statement.

More than half (55%) of respondents state that it is very likely they will use cryptoasset ETPs for the first time in the next two years, either to increase their exposure or to make their initial investment. About a fifth (19%) indicate that they already use them, while 23% point out that they are quite likely to invest in them. Only 3% appeared unsure or unlikely to use them.

Respondents show confidence in the expansion of global net inflows into digital asset ETFs: more than four out of five (81%) expect net flows to increase in the next 12 months, including 19% who foresee very significant increases.

The study, conducted in the U.S., UK, UAE, Germany, Switzerland, France, Italy, Netherlands, Singapore, Brazil, and the Nordic countries, concludes that the increase in flows into ETPs will be beneficial for the overall sector. Nearly 90% state that the growth of ETPs has had a positive impact on their organization’s perception of the digital asset market.

Almost nine out of ten respondents (87%) predict that the growth of ETPs will increase demand for active digital asset managers and hedge funds in the next 24 months, with 22% estimating a significant increase. Only 3% expect ETF growth to slightly reduce demand for active management.

However, more than half (52%) note that regulatory uncertainty remains the biggest obstacle to increasing institutional use of cryptoasset ETPs. Around 44% fear that ETFs do not solve underlying market or custody risks, while 40% express concern over liquidity and trading costs.

The main reason for using cryptoasset ETPs cited by respondents is the greater ease of obtaining approval from investment committees or boards of directors (28%). Around 21% value their liquidity and transparency, while 20% highlight operational and custody simplification. Nearly three out of four (74%) state that fees or TER (Total Expense Ratio) are critical or very important when selecting funds.

Opinion is divided on which region will experience the fastest growth in institutional assets under management (AUM): 27% point to the U.S., another 27% point to Europe, and 26% to the Middle East. Only 11% chose the UK.

By product type, multi-asset crypto baskets are expected to register the highest institutional growth over the next two years (45%), followed by actively managed digital asset ETFs (43%). Nearly two out of five (39%) opted for staking or yield-generating products, and 38% for tokenized real-world asset funds.

“Crypto ETPs are fast becoming a vital bridge between traditional finance and digital assets. By providing familiar, transparent, and operationally simple access, they are helping investment committees bring digital assets into the mainstream portfolio construction conversation. However, ETPs primarily offer passive market exposure. As institutional participation deepens, we anticipate rising demand for specialized active managers capable of navigating the market’s inefficiencies, volatility, and operational complexity. At Nickel, we have built an institutional-grade risk management framework, custody infrastructure, and investment capabilities designed to capture these opportunities with the governance and protection standards demanded by institutional investors,” highlights Anatoly Crachilov, CEO and Founding Partner of Nickel Digital.

Ben Lord (M&G): “The Bond Market Is Regaining Control”

| By Amaya Uriarte | 0 Comentarios

Photo courtesyBen Lord, Fund Manager at M&G Investments

“My two strongest convictions are that sovereign bonds are really attractive and that investors need to be cautious with risk. Risk markets are ignoring all kinds of problems, potential shocks, and valuation issues.” These are statements from Ben Lord, fund manager at M&G Investments. Lord was one of the spokespersons chosen by the firm to celebrate 20 years of Bond Vigilantes, in a series of conferences held in Madrid. In an interview with Funds Society, Lord expressed his view that investors should maintain long positions in sovereign bonds, especially from the United States and the United Kingdom. “If we analyze returns across all fixed income, 75-80% of the opportunity comes from sovereign bonds,” he asserts.

Why sovereign bonds?

Sentiment toward sovereign bonds is terrible. Central banks have missed their inflation targets for five years. Governments are not cutting spending or raising taxes enough, and they continue to spend more and more. That means they have to issue more and more public debt, and that is the context we find ourselves in. This is the current market environment.

So, do you find sovereign bond yields attractive?

In our view, it all depends on valuation, and with bonds above 3.5%, British bonds above 5.5%, and Treasuries above 5.3%…, these are levels where we see long-term value. We believe that the nominal yield on the 10-year sovereign bond should essentially sit around the average level of nominal GDP. That is, 2% inflation plus real GDP growth of 1%-2% over ten years. That means that when we are above 5% in the United States and the United Kingdom, these levels start to look interesting.

In the United States, one could say that today inflation is at 3% and growth is at 3.5%. That implies a nominal GDP of 6.5%. Therefore, one could argue that 10-year Treasuries do not offer a good valuation. I would say it is quite difficult to expect that for ten years inflation will remain at 3% and U.S. real GDP will continue growing at 3.5%. I think both levels will probably come down. In the United Kingdom, inflation is at 3%, but real GDP is between 1% and 2% and is declining.

I know there are risks. But when you analyze 10-year sovereign bonds, you have to keep in mind that there will be changes over the next ten years. That is why we see value, as we consider that if we assume 2% inflation and 2% real GDP growth, 4% is roughly the level where we should be neutral. And we are well above that level in both the United Kingdom and the United States. In Europe, we believe inflation will probably settle at 2% and real GDP around 1%. Therefore, we have a nominal GDP of 3% in Europe, while 10-year bonds are at 3.6%.

How long can these levels persist?

If the cost of a government’s debt is higher than its nominal GDP—that is, its potential growth—in the long run borrowing at those levels will have consequences for the economy because funding becomes very expensive. More and more money will go toward interest payments, which takes resources away from other areas. Ultimately, high debt costs reduce potential growth. That is why we believe it makes sense to maintain long positions. It is also very easy to say that governments are simply going to borrow more and more and that we will end up entering a crisis. That risk exists. And I think many people are comfortable holding short positions in duration and in sovereign bonds. But they are relying on the idea that, when the crisis comes, they will be able to switch to long positions in duration.

That sounds fairly complicated

It is impossible. I have never been able to time the market. I have never met anyone who can. I would really question anyone’s ability to maintain a short position right now. The crisis can hit any day. And when a crisis hits the sovereign bond market, what happens? Governments have to cut spending. They have to raise taxes. They are forced to do it quickly and aggressively. Let’s go back, for example, to 2011-2012, with the sovereign debt problems in the European periphery. It was very easy to stand there holding short positions and think that there was nothing anyone could do. But Mario Draghi came along and said he would do “whatever it takes.”

And look at everything that happened afterward… What we are saying is that yes, it is scary. Yes, it has hurt. Yes, it has been a bad few years as yields have gone up. But you have to maintain long positions if you want to benefit when the moment comes, when governments get the message, when a bailout is required, or when a failed auction occurs. Suddenly, governments will have to fix it. And on that day you need to be long.

Do you think central banks are closer to committing a monetary policy error?

What I find interesting is that we have a supply shock in oil. It is caused by a single person. That is a tax on consumption. Between 2022 and 2024, everyone had a lot of savings left over from the pandemic. Those savings have already been exhausted in the United States and the United Kingdom. In Europe there is still a fraction left, but it is much smaller than two or three years ago.

Real wages are now growing between 2% and 3%, while average real disposable income is growing between 0% and 2%. Therefore, we are not in a particularly strong consumer environment. Now we have a tax in the form of higher energy and fertilizer costs. And El Niño. All these factors act as a tax on consumption.

And now, since central banks have taken five years to bring down inflation, the bond market is saying: you have had enough time. If you do not bring down inflation now, the bond market is going to react. For that reason, I get the sense that the bond market is regaining control. But if we combine more expensive energy, potentially more expensive food and fertilizers due to other related global events, and now we also raise interest rates because the bond market needs inflation to come back down after so much time, yes, there is a clear possibility that central banks will overtighten monetary policy.

What are the chances of a recession occurring?

In risk markets, I get the feeling that the probability of a recession is practically 0%. It is enough to look at where stock markets, credit spreads, and valuation differentials are. But if we are tightening monetary policy for governments, companies, and households while at the same time all of them are facing these cost-of-living pressures, there is a high probability that the tightening occurs at the worst possible time, when demand is falling.

Is there a risk of a fiscal policy error?

If excessive tightening occurs, there is a possibility that we have a consumer recession. The traditional economic policy response over the last 40 years to a slowdown has been to announce large spending programs. Now there is a higher probability than there has been in a long time that the bond market would react negatively to that kind of fiscal easing.

But that is not my central scenario. If we enter a slowdown, there is one thing I do know: central banks will cut rates. They will cut them aggressively. Therefore, my view would be that if we enter a recession, stock markets will fall, credit spreads—both high yield and investment grade—will widen, and what will investors buy? They will buy sovereign bonds. If a negative reaction occurs in the bond market—and it is not my central scenario, but it is something we have to consider—perhaps one would need to be more cautious with long-maturity sovereign bonds. To me, that would be a term premium shock.

So, what would you do in the event of a recession?

Generally speaking, I would be bullish on sovereign bonds and duration if we ultimately enter a slowdown for any reason. But beyond that, if rate cuts or hikes occur more aggressively, that could generate a really strong shock.

My first reaction is to think that, in a risk-averse scenario triggered by a recession, investors will flock to sovereign bonds. They are the cheapest assets I see. But we have to accept that a tail risk exists: if politicians react to a slowdown or a recession aggressively and announce a lot of public spending, the bond market might not welcome it. Therefore, I would start favoring 2-, 5-, 7-, and 10-year sovereign bonds, and I would be more prudent with 20- and 30-year sovereign bonds.

Catalysts for the Final Stretch of the Year

| By Amaya Uriarte | 0 Comentarios

September was, as expected, a negative month for stock market returns. However, according to historical seasonal patterns, we are now entering the friendliest period for equity market investors.

With the T-Bond yield at 19-year highs, the intensification of conflicts in Ukraine and Iran, and persistent doubts regarding the sustainability of investment in the AI theme, the market stalled in September and investor sentiment also suffered from a lack of visibility. And, despite all of this, this week the S&P 500 reached record highs again.

Multiple compression, in an environment of very strong growth in earnings per share, has acted as a shield against geopolitical uncertainty and the flattening of the yield curve.

The fact is that signs point to an interesting end of the year in stock markets.

Inflation, Fed, and Warsh’s Working Groups The latest employment data, with worse-than-expected payroll growth in the U.S., consolidates the idea that the Fed’s focus of attention remains on inflation.

Likewise, last week’s latest PCE release—along with the drop in the price of a barrel of crude oil—provides positive short-term signals, confirming inflation expectations (measured with 5-year 5-year forward breakevens) that have been retreating in recent months and are approaching the 2% mark. In addition, there are indications pointing to a decline in structural price pressures. The U.S. PCE inflation trend indicator calculated by the New York Fed, which seeks to capture the persistence of inflationary pressures, has been falling since April and, although it is a series subject to revisions, Truflation’s “real-time” inflation gauge offers a similar perspective.

It is curious that surprises in U.S. inflation and hiring data have abated considerably since June, while the Fed toughens its hawkish rhetoric. However, the divergence does not necessarily imply inconsistency: the Fed reacts to the level of inflation—with core PCE still at 3.4%, after five years above the target—rather than to the pace of surprises, and with a real rate close to ~0.5% it considers its policy barely restrictive. Added to this is a credibility component: a new chairman under public pressure to cut rates has incentives to demonstrate independence before opening the door to a pivot.

The results of the Fed’s working groups (communication, balance sheet, data sources, productivity and employment, and inflation framework) could be an unexpected positive surprise ahead of the end of the year. Revising the inflation framework cannot be done with credibility if the Fed appears dovish while doing so. The data sources group could be key: Warsh prefers market-based and real-time inflation indicators (breakevens, Truflation-style measurements), and today those indicators point to disinflation. It is a hypothesis, but I would watch that group as a potential catalyst for a turn toward a less hawkish policy in 2027.

Valuation, Elections, and Earnings: The Bullish Case Real growth in the U.S. economy, wages, and inflation are already very close to the stage prior to the COVID-driven IPC surge. Although this does not mean we will return to a rate environment similar to that period, the curve does appear to maintain excessive skepticism regarding rate hike expectations. The spike in the bond yield relative to estimated U.S. GDP growth for the next 12 months sits at more than 1.5 standard deviations, a threshold that, since 1980, has resulted in past bond price rallies.

If this happens again, in an environment of solid corporate earnings growth, the S&P 500’s multiple would have room to recover.

38.7% of the stocks that make up the S&P 500 have accumulated drops of 39% from their 12-month highs. With the market anticipating greater monetary policy tightening than what is conveyed by the Fed’s “dot plot,” the context seems ideal for a positive repricing of risk assets before the end of the year.

We are just a few weeks away from the midterm elections. Betting houses and polls show a certain balance in the Senate (with positive momentum for the Democrats), and certainty regarding the Republicans losing the House of Representatives. Since 1950, three episodes have been recorded (out of the 19 midterms that have taken place since 1950) in which the opposition (in this case, the Democrats) snatched control of both houses from the incumbent party. 12 months after the elections, returns are positive in all cases and exceed, on average, both the S&P 500 return across all periods and the unconditional return and that recorded across the 19 midterms analyzed since 1950. The historical precedent is favorable, but, considering that only 3 of the 19 observed processes showed the likely outcome on November 4, the solid argument supporting good post-election performance is the midterm cycle, not the composition of Congress.

Along the same lines and, as explained above, the period between October and December is historically the most profitable for investors. The market has cleared technical overbought conditions, and investor sentiment has shifted to become less optimistic and more skeptical.

Finally, next week the earnings reporting season begins in the U.S., and the third quarter is shaping up to be positive for investors. Consensus anticipates that all 11 industrial sectors comprising the S&P 500 will report growth in revenues and earnings, an almost unprecedented situation over the last 25 years. The bar, however, is set higher than in previous quarters.

Capital Group Obtains FSRA License in Abu Dhabi and Expands Its Presence in the Middle East

| By Amaya Uriarte | 0 Comentarios

Photo courtesyMike Gitlin and Benno Klingenberg-Timm, from Capital Group

Capital Group has obtained authorization from ADGM’s Financial Services Regulatory Authority (FSRA) to provide financial services and operate as a regulated investment manager. The authorization enables Capital Group to conduct trading, investment management, and distribution activities in ADGM. As explained, this regulatory milestone marks a new phase in its long-term commitment to the region.

In May 2026, the firm announced its plans to establish its first office in the Middle East in Abu Dhabi. Since then, it has relocated employees from North America, Europe, and Asia to bring its investment, operational, and client coverage capabilities closer to clients and opportunities in the region. Local presence is expected to continue growing in line with business and client needs.

“Establishing a regulated presence in Abu Dhabi brings us closer to our clients and to investment opportunities across the Middle East, a region where we have been present for many years. From day one, we will have a significant presence, with on-the-ground capabilities in investment, operations, and client service. Just as was the case with the opening of our Singapore office in 1989, we are bringing together all of Capital Group’s expertise in Abu Dhabi, which reflects our confidence in the region’s long-term growth,” stated Benno Klingenberg-Timm, Head of the Abu Dhabi office and Head of Institutional for Europe and Asia at Capital Group.

For his part, Ahmed Jasim Al Zaabi, Chairman of ADGM, commented: “We are pleased to welcome Capital Group, a global investment manager, following its establishment in Abu Dhabi. Their decision reflects the strength of Abu Dhabi’s financial ecosystem and ADGM’s growing position as a premier international financial center for global institutions seeking long-term opportunities across the region.”

“The Middle East is of strategic importance to Capital Group and to our clients. Securing our regulatory license in Abu Dhabi reflects our long-term commitment to the region and our conviction that it will continue to develop as a world-class international financial hub. We look forward to further strengthening our relationships with clients and partners,” added Mike Gitlin, President and Chief Executive Officer of Capital Group.

BNY Expands Its Digital Asset Custody Platform in Europe

| By Amaya Uriarte | 0 Comentarios

BNY has announced the expansion of its Digital Asset Custody platform for selected institutions in the European Union under the Markets in Crypto-Assets (MiCA) framework, making BNY “one of the first global systemically important banks to offer regulated custody of digital assets in the region.”

According to company statements, the expansion follows the inclusion of The Bank of New York Mellon SA/NV, BNY’s European banking entity, in the European Securities and Markets Authority’s MiCA register in July 2026, which allows BNY to provide custody, administration, and transfer services for crypto-assets on behalf of its clients in one of the world’s largest regulated digital asset markets.

“The adoption of digital assets is accelerating across Europe: from banks and broker-dealers expanding their crypto-asset and stablecoin offerings, to asset managers and corporate treasurers leveraging digital payments and tokenized securities to improve liquidity, settlement, and collateral mobility,” points out Jennifer Barker, Head of Europe at BNY. Barker adds that to support increasingly digital strategies, institutions need solutions with the same resilience, oversight, and safeguards they rely on in their traditional operations. “By expanding our platform in Europe, we provide clients with an institutional-grade infrastructure to navigate this transition with confidence,” she specifies.

Secure and Regulated Digital Asset Custody

Launched in 2022, BNY’s Digital Asset Custody platform offers secure custody and management of digital assets through an infrastructure designed with security and risk management controls, including multi-party computation technology, segregated client wallets, and private key storage.

Through a well-developed custody model, BNY can offer market participants regulated access to assets such as BTC, ETH, SOL, and USDC, with the ambition to support a broader range of crypto-assets and stablecoins.

“Our platform is not a standalone solution; we built it on the deep expertise, rigorous controls, and firm commitment to client trust that underpin our existing asset services franchise. As we expand this capability, we prepare more clients to integrate their current operations with emerging digital strategies more seamlessly, efficiently, and transparently across the entire asset lifecycle,” comments Emily Portney, Global Head of Asset Services at BNY.

Foundation for Innovation in Digital Assets

Digital Asset Custody is the foundation of BNY’s digital asset capabilities, as it supports use cases in digital cash, tokenized assets, payments, settlement, and collateral mobility across the financial ecosystem. According to Carolyn Weinberg, Chief Innovation and Market Transformation Officer at BNY, “thanks to our central role and scale in capital markets, BNY remains committed to building the financial infrastructure of the future in partnership with our clients. This expansion reflects our ongoing investment in BNY’s capabilities to connect traditional and digital financial ecosystems, as well as to develop solutions that drive new forms of financial activity for our clients globally.”

Private Equity: Liquidity Solutions Are Here to Stay

| By Amaya Uriarte | 0 Comentarios

After the liquidity episodes of previous years, starting from last year’s low point, private equity is in the process of recovery. Despite better figures and somewhat more liquidity in the market, consultancy firm McKinsey expects that the liquidity solutions the industry has been shaping in recent years will remain in place. These types of liquidity vehicles, they stated in the latest version of their Global Private Markets Report, are here to stay.

“LPs are demanding more than just paper returns,” warned the consultancy firm. “Their understandable imperative is causing LPs and GPs to rely on a full suite of liquidity solutions, such as partial realizations and a more robust secondary market,” the firm indicated in its report. Partial realizations, McKinsey explains, provide temporary liquidity relief to managers, which is something they can pass on to their LPs who are dealing with capital calls from their alternative investment programs.

Thus, in a context where the holding period of private equity assets has been lengthening, “partial realizations show that GPs are increasingly recognizing the viability of generating liquidity from an aging asset.” Furthermore, secondary transactions surpassed their 2024 record and reached new heights in 2025, growing 48% to 240 billion dollars. This figure, the consultancy firm indicated, “was driven by the ongoing pursuit of liquidity in an environment of low distributions.”

Meanwhile, they added, GP-led transaction volume reached 115 billion dollars last year. This figure, they detailed, was fueled by greater use of continuation vehicles, even with the rebound in the IPO market. With all these elements on the table, McKinsey’s conclusion is that these solutions, which have earned a spot in the private equity ecosystem, will continue to be a prominent piece despite the improvement in liquidity conditions.

Here to Stay

“Liquidity solutions, such as GP-led transactions (the majority of which are continuation vehicles), have more than tripled in value over the past five years, rising from 35 billion dollars in 2020 to 115 billion dollars in 2025,” the consultancy firm indicated in its report. Current estimates suggest that 14% of all sponsor-backed exits go through continuation vehicles. And LPs’ expectation is for that figure to increase: they anticipate that 20% of such deals will go through continuation vehicles at the end of their holding period now, and that 29% will do so in the next five years.

Along those lines, given the proliferation of these situations, investors are paying closer attention to the underlying assets and watching to ensure that liquidity does not become a breeding ground for poor management. “LPs are showing concern that continuation vehicles could be used to hide underperforming assets. Our survey indicates that around 30% of LPs consider the assets in this type of vehicle to be ‘distressed’ or ‘challenged’,” the firm stated in its report.

For this reason, McKinsey emphasizes that this underscores the need for more transparency and alignment between managers and fund contributors, “as the PE industry navigates a more complex investment lifecycle.” That said, the survey also showed that LPs are generally not penalizing GPs who use continuation vehicles to extend the life of an asset. Nearly two-thirds of respondents express a neutral or positive view of investing with firms that typically apply these types of structures.