Photo courtesyRepresentatives of the ReachingU Foundation, from Left to Right: Gustavo Civetta, Director; Paula Mosera, Executive Director; Beatriz Ponce de León, Board Chair; Pía Sojo, Director; Nick Stanham, Director; Pablo Haberer, Director; and Ricardo Salmon, Director
Artificial intelligence and education may seem like distant worlds, but they were precisely the two ends of a single conversation during ReachingU’s 25th anniversary celebration dinner in Miami.
The Uruguayan foundation, dedicated to expanding educational opportunities for children and adolescents in the country, brought together members of its community and allies on Wednesday, September 16, at the EAST Miami Hotel for an evening that combined philanthropy, technology, and art.
One of the central themes of the night was the transformation being driven by artificial intelligence. Nicolás Loeff, co-founder and CTO of BrainLogic AI, shared a perspective on the global evolution of this technology and the changes it is generating across various fields.
Another perspective came directly from Uruguayan classrooms. Teacher Pablo Mollo brought a much more concrete reality to the table: the daily challenges of education and the impact of programs aimed at expanding opportunities for students.
The contrast between both perspectives ultimately gave the gathering a significance that extended beyond the anniversary itself. As technology redefines the tools and capabilities available to new generations, educational systems face the challenge of ensuring those opportunities effectively reach children and youth.
The program also featured an artistic component. During the evening, a live auction was held for works donated by artists connected to the foundation. Among the auctioned pieces was “Fuente de Luz,” a sculpture created by Pablo Atchugarry specifically to commemorate ReachingU’s 25 years, alongside a work by Guillermo García Cruz and two silkscreen prints by Daniel Supervielle.
The event featured UBS as the main sponsor and partner of the foundation, while EAST Miami Hotel hosted the evening. Vinos Santa Rosa and Chocolates Haas also participated as event supporters.
Beyond the celebration, fundraising remained the core focus. The resources raised during the night will go toward the educational programs ReachingU develops in Uruguay, which aim to expand opportunities for thousands of children and adolescents.
The anniversary arrives at a time when education faces a dual transformation: on one hand, the accelerated adoption of artificial intelligence tools; on the other, the persistence of gaps that determine who can truly access better educational opportunities.
For ReachingU, the commitment remains firmly at that intersection: turning education into a pathway to expand possibilities for future generations while mobilizing private resources toward that goal from Miami and other international communities.
Sandro Pierri, Chief Executive Officer of BNP Paribas Asset Management.
BNP Paribas Asset Management has implemented its new organization, an important step in integrating its expanded businesses and executing its 2030 strategic plan. As explained, this new organization is designed to take advantage of the scale and complementary capabilities of its combined platform, driving growth among institutional, insurance, individual, and wealth management clients.
Its objective is to “accelerate the execution of the 2030 strategic plan while enabling BNP Paribas Asset Management (BNP Paribas AM) to fully take advantage of the capabilities of the broader BNP Paribas Group ecosystem.” Consequently, the Alternative Assets business line, led by Isabelle Scemama, Deputy CEO of BNP Paribas AM and Head of BNP Paribas AM Alts, with the support of Deborah Shire, Deputy Head of BNP Paribas AM Alts, maintains its integrated model, which combines investment expertise with dedicated support for each client.
With more than thirty years of experience across various alternative asset classes, including real estate, infrastructure, alternative credit, and private equity, the asset manager considers the business well-positioned to accelerate the ambitions set out in the asset manager’s 2030 strategic plan. Among these are expanding its offer, increasing third-party capital raising, and facilitating greater access to alternative investment solutions.
The Investments business line, led by Rob Gambi, Global Chief Investment Officer, brings together BNP Paribas Asset Management’s capabilities in fixed income, fundamental active equities, multi-asset, and systematic and quantitative investments. As explained, the platform is structured around specialized teams while leveraging greater scale, a broader range of capabilities, and increased research resources. Its objective is to foster the development of solutions that respond to evolving client needs and contribute to achieving the goals set out in the manager’s 2030 strategic plan: expanding the scale of active management and accelerating the development of the company’s ETF and index fund business.
For its part, the Global Client Group Liquid Strategies, led by Steven Billiet, Head of Liquid Strategies at Global Client Group, aims to broaden and deepen relationships with clients investing in BNP Paribas AM’s liquid investment strategy platform. “Leveraging the organization’s greater commercial reach and capabilities, it seeks to strengthen commercial coordination across markets and product lines and accelerate growth in institutional, insurance, retail, and wealth management client segments,” they state.
The business lines are supported by a series of cross-functional support areas, with a stronger focus on Strategic Alliances and Transformation, as well as an evolution of the sustainability model: the Global COO Office, led by Philippe Boulenguiez, Global Chief Operating Officer; the General Secretariat, led by Jean Christophe Ménioux, General Secretary; Human Resources, led by Marion Azuelos, Global Head of Human Resources; Strategic Alliances Office, led by Justyna Dajka, Global Head of Strategic Alliances; and a dedicated Transformation Office, led by Patrick Simion, Head of Transformation, and Communication and Brand, led by Marie Bogataj, Head of Communication and Brand. As noted, the Sustainability organization will evolve and include a cross-functional Sustainability Center, led by Jane Ambachtsheer, Global Head of Sustainability. As part of this reorganization process, BNP Paribas Asset Management has to date formalized the appointment of 200 managers, and new appointments are expected over the coming months.
Executive Committee
Finally, and to “further enhance decision-making efficiency,” the manager is also creating an Executive Committee, responsible for driving strategic direction and priorities. Chaired by Sandro Pierri, it will consist of Isabelle Scemama, Rob Gambi, Steven Billiet, Jean Christophe Ménioux, Marion Azuelos, Philippe Boulenguiez, and Deborah Shire.
“Our strategic plan sets a clear ambition for BNP Paribas Asset Management and defines the areas in which we want to grow. Our new organizational model will allow us to go even further in bringing value to our clients and accelerating the execution of our strategic priorities. It provides us with the scale and capabilities needed to deepen our relationships, leverage the full strength of the BNP Paribas Group, and generate long-term value for our clients,” said Sandro Pierri, CEO of BNP Paribas Asset Management.
The advance August inflation figure delivered a negative surprise. Headline CPI came in as expected (+0.4% month-over-month) and remained flat year-over-year at +3.4%. However, core inflation breached the +0.2% mark to reach +0.3%, despite a modest slowdown in year-over-year growth (dropping from 2.5% to 2.4%).
This uptick—driven primarily by mobile phone and communication services, airfares, and lodging—could leak into the August core PCE readings due on the 30th, likely triggering a year-over-year increase of ~+0.3% (up from 0.2% in July).
The postponement of the expected summit between Iran and the Gulf nations—now pushed to Sunday to formulate an alternative transit route through the Strait of Hormuz—alongside new comments from Trump (“Iran is desperate to make a deal quickly”) convey urgency ahead of the upcoming November midterms and shift leverage to Tehran. Consequently, Brent crude rose to $109 per barrel, raising the odds of a prolonged monetary tightening cycle (markets are now pricing in nearly four Fed rate hikes between now and the summer of 2027).
Although the overall trajectory of inflation continues to move closer to the 2% target (as reflected by the average of trimmed-mean, supercore, and sticky inflation metrics), progress has not been as fast as the Federal Reserve’s FOMC would prefer. Adding to these concerns are the price and growth impacts of massive AI investments and strong nominal economic activity, with Atlanta Fed real final sales (which measure total output value adjusted for inflation excluding inventory shifts) holding at three-year highs.
Given this setup, the probability of a 25-basis-point hike (bringing rates to 4%) jumped toward ~90% over the weekend. This presented Kevin Warsh with an opportunity to build market credibility through an insurance hike—one unlikely to derail an economy expanding at nominal growth rates above 7%. Standing pat, by contrast, would have seemed contradictory following his hawkish tone at Jackson Hole.
Warsh entered the decision balancing two forces: accommodating a vocal president or delivering what the bond market was demanding to secure its confidence. While Trump holds immense executive authority, the bond market exerts its own formidable influence on policy.
Warsh opted to raise rates by 25 basis points in a unanimous decision—the first increase since 2023—aiming to guide inflation back toward the 2% target over a reasonable horizon. Statements and the updated dot plot (one additional hike in 2026 priced in for December, a pause through 2027, and cuts starting in 2028) frame this as a mini-cycle of preemptive hikes. The Fed’s upward revision to the terminal rate is supported both by AI-driven productivity gains—a view Warsh strongly champions—and by the continuation of pro-cyclical, expansionary fiscal policies dating back to Trump’s first administration.
Fixed Income Positioning and Key Drivers
Within fixed income, if current inflation forecasts hold, positive surprises are more likely moving forward. With the market having largely priced in the Fed’s stance, a neutral duration posture appears prudent. Close attention should be paid to labor market indicators that could shift the Fed’s path if momentum accelerates, including wage gains among job switchers, shifts in marginally attached workers, hiring demand within AI infrastructure, and jobless claims trends.
The Bank of Japan’s dovish 25-basis-point increase—taking its policy rate to a 30-year high—is another focal point. Higher Japanese yields and increased yen volatility could impact the carry trade, which historically provided funding flows into U.S. fixed income markets.
Energy price relief could offer another upside surprise, following news that the Saudi East-West pipeline can resume operation at half capacity immediately, with full repairs slated within six weeks. Meanwhile, central bank activity tracking indicates a clear inflection point away from global monetary easing, suggesting softer industrial momentum entering 2027.
Equities: Impact of the Hike Mini-Cycle on AI
For equity markets, elevated borrowing costs tied to this rate-hike mini-cycle may disproportionately pressure AI companies carrying leveraged balance sheets. Early-stage startups lacking credit ratings—such as specialized neocloud providers—may encounter higher hurdles securing funding for data center builds.
Compounding this are growing public objections to data center construction (Morgan Stanley research indicates 75% of Americans and 83% of Democrats oppose hosting such facilities locally; as a result, $156 billion in projects were delayed or canceled in 2025, followed by another $130 billion in Q1 2026). These constraints could limit total compute supply, benefiting early-moving hyperscalers.
Hyperscalers have secured significant long-term, fixed-rate financing at borrowing costs well below current 10-year Treasury yields, leveraging their investment-grade credit profiles.
Slower deployment of AI capital expenditures—which contributed ~0.6% and ~0.4% to GDP in Q1 and Q2, respectively—could also exert downward pressure on overall inflation readings.
From a historical perspective, analysis of the past six U.S. rate-tightening cycles indicates that while equities often experience short-term volatility following an initial rate hike, broad indexes generally post positive total returns 12 months later. The primary exception remains 2022, when the Fed fell significantly behind the curve.
Knighthead International seeks to deepen its presence in Latin America and the non-resident client (NRC) market with the hiring of Shane Cunningham, an executive with over two decades of experience in asset management and international distribution. Cunningham joins the firm to lead initiatives related to relationship management and business development in both markets, at a time when Knighthead is expanding its partnerships with distribution partners across the region.
His arrival brings to the company a track record particularly tied to the offshore business. Prior to joining Knighthead, Cunningham served as Managing Director and Head of US Offshore and Latin America at Axxes Capital. He previously spent a significant portion of his career at Franklin Templeton, where he remained for around 20 years and held, among other roles, the position of National Sales Manager for Offshore. From that position, he was involved for 15 years in international distribution operations, with responsibility for the non-resident client market, Canada, and the Caribbean Islands. He was also President and CEO of Templeton Franklin Investment Services (TFIS), Franklin Templeton’s broker-dealer entity.
For Knighthead, that precise knowledge of distribution channels and the international wealth management community represents one of the key assets brought by his appointment. “Shane brings to our team a combination of international distribution experience and deep market knowledge,” stated Tyler Bent, Co-Head and Chief Operating Officer at Knighthead. The executive highlighted that the addition will strengthen the firm’s collaboration with distribution partners in both Latin America and the non-resident client segment, while adding specialized expertise and insights to its international platform.
Latin America, a Key Component of the Offshore Strategy
The move also signals where Knighthead identifies part of its growth opportunities. Ed Massaro, CEO and CIO of Knighthead Insurance Group, noted that Latin America and the NRC market represent priority areas for the company. The strategy will rely not only on the firm’s offering, but also on the relationships Cunningham has built throughout his career in the international wealth management industry.
Massaro highlighted the combination of that contact network, Knighthead’s leadership team, and the organization’s operational capabilities as a foundation to expand engagement with business partners across different markets. This focus is particularly relevant for a segment where financial institutions and wealth managers seek to serve Latin American clients with structures and products designed for investors who maintain a portion of their wealth outside their countries of residence. In this context, offshore annuities represent one of the areas where Knighthead has concentrated its activity by offering products aimed at non-U.S. residents.
Cunningham will work in coordination with the firm’s senior leadership and international distribution teams to develop these initiatives and support global commercial expansion. Rather than a mere personnel change, the appointment represents a targeted move to strengthen distribution channels and relationships with intermediaries in two markets Knighthead considers strategic: Latin America and non-resident clients.
The legendary Warren Buffett recently turned 96 and, in accordance with the succession roadmap designed many years prior, has fully relinquished the reins of Berkshire Hathaway by assuming the duties of Chairman Emeritus. However, he did not miss the opportunity to leave one more lesson as part of his intangible—yet equally valuable—legacy.
Without a trace of defeat, Warren Buffett acknowledged the only opponent no investor can defeat. “Father Time always wins,” he wrote to Berkshire Hathaway shareholders as he explained his decision to become Chairman Emeritus. But in his case, he added something more: “he has been generous to me.”
The phrase summarizes far more than just a change in corporate title. In the letter accompanying Berkshire Hathaway’s announcement, Buffett does not write as someone abandoning a company after six decades, but as someone observing the passage from one generation to another, evaluating which part of his work should survive when he is no longer at the helm.
Since 1965, Buffett has been the central figure of Berkshire. Now he leaves the chairmanship of the Board, and Howard G. Buffett, his son, will assume that responsibility, while Greg Abel will continue at the operational helm as Chief Executive Officer. Warren Buffett will remain as a member of the Board.
The transition, therefore, does not represent a rupture. In fact, Buffett himself presents it as the logical conclusion of a process that had been in preparation for years. The novelty of his message lies elsewhere: in how he explains what he considers truly important to preserve at Berkshire.
And his answer is surprising because it is not a stock, an acquisition, a cash reserve, or any other financial asset—it is something he considers far more valuable: culture.
The True Asset Is Off the Balance Sheet
Buffett writes that Greg Abel manages the company, while Howard Buffett will bear the responsibility of protecting its culture and values. He immediately establishes an unusual hierarchy in business parlance: both elements possess, he says, a value superior to that of any asset recorded on Berkshire’s balance sheet.
The statement is especially meaningful coming from the man who built Berkshire into one of the largest business conglomerates in the world and who for decades was considered one of the primary benchmarks of long-term investing.
At the moment of handing over control, Buffett does not speak of maintaining a specific level of profitability, keeping a particular portfolio, or reaching a certain market capitalization; he speaks of preserving a way of doing business.
It is precisely there that one of the keys to his legacy emerges: Berkshire was not built solely around the investments that Buffett and Charlie Munger selected. It was also built around a philosophy—thinking in terms of decades, avoiding impulsive decisions, maintaining a unique relationship with shareholders, and granting managers of acquired companies a considerable degree of autonomy.
That is why succession does not simply consist of finding someone who can sit in Buffett’s chair; it consists of proving whether an organization can maintain its principles when the person who embodied them for more than six decades is no longer in command.
An Insurance Policy for Shareholders
Buffett leaves in his letter one of his customary metaphors to explain his son’s role: Howard Buffett, he says, should be viewed as “an insurance policy” owned by the shareholders—one that everyone hopes never to have to use. Coming from Buffett, this is telling.
Furthermore, Greg Abel is at the operational helm. Howard does not step in to manage Berkshire’s day-to-day operations, but rather to act as a custodian of what does not appear on the financial statements: culture and values. This division of responsibilities demonstrates the extent to which the succession was designed as an institutional process rather than merely replacing an individual.
Buffett points out that Howard has served as a director of Berkshire for 33 years—a period even longer than the time he himself had to learn before taking control of the company at age 34. In this sense, the message is clear: succession does not begin the day Buffett steps down from a role; in reality, it began decades earlier.
Time as an Enemy and as an Ally
There is an irony in all of this that says much about Warren Buffett: for decades, the investor turned time into one of Berkshire’s primary advantages. While much of the financial market moves to the rhythm of quarterly earnings, Buffett and Munger built their reputation on patience and the ability to think long term.
In his letter, Buffett recalls precisely that from the beginning they sought shareholders who thought “in terms of decades rather than quarters.” Now, however, time appears from a different perspective. Buffett has just turned 96, and after more than 60 years leading Berkshire, he acknowledges that the time has come to complete the transition.
Yet he does not present it as a tragedy or a crisis—quite the contrary. He says he still has “the best job in the world” and has never felt better about what lies ahead. This is likely one of the most interesting aspects of the letter: Buffett does not describe his departure as the end of an era to be mourned, but as a natural consequence of the very same principle he recommended to his shareholders for decades: thinking long term.
Time ultimately wins, but preparation can determine what happens next. Buffett is not leaving Berkshire; rather, Berkshire no longer needs him to run it. There is another important distinction: Buffett is not departing Berkshire entirely, as he continues as a director and shareholder. In his letter, he expresses his desire to remain a shareholder alongside the rest of the owners.
That changes the meaning of the transition. The man who for decades made the fundamental decisions will no longer occupy the position from which they are made, but he will continue to observe the company’s evolution from within and participate in it as an owner.
This aligns seamlessly with the relationship he always sought to build with shareholders: sitting on the same side of the table. That is why, rather than a farewell, the letter carries the tone of passing the baton. Buffett seems to be saying that Berkshire no longer needs him to serve as its operational core because key decisions can be made by others and because, at least in his view, the principles he considers essential are deeply rooted.
Greg Abel is proof of that trust. Buffett asserts that his expectations for him were very high from the start, and that Abel has exceeded them. He also states that Abel has been making the truly important decisions for some time, and that he has never had reason to doubt any of them.
The statement carries special weight: succession does not begin now simply because Abel has officially received power; it formalizes a dynamic that was already largely in place.
From Charlie Munger to Howard Buffett
The letter also has a generational dimension: throughout much of Berkshire’s modern history, Buffett and Charlie Munger were inseparable from the company’s identity. Munger passed away in November 2023, just days shy of his 100th birthday. Now Buffett steps back further, doing so by leaving behind an organization where continuity no longer depends on two historic figures at the helm.
That may represent one of Berkshire’s greatest challenges in the coming years: demonstrating that what worked extraordinarily well under Buffett and Munger can continue to work when both belong to the company’s history. Buffett appears confident that it will, not because he believes a replacement for himself exists, but because he believes the organization he built can prove more enduring than the man who built it.
Perhaps that is why the final section of his letter is more significant than the corporate announcement itself. Buffett thanks the shareholders for the trust they placed in him and calls serving as their chairman “the privilege of a lifetime.” He then returns to the concept of time: “Father Time always wins,” he writes.
Immediately, however, he refrains from framing the phrase as a tragedy, writing instead that time was generous to him because it allowed him to see Berkshire reach a point where he feels more confident than ever about its future. That is perhaps the true message and final lesson of his last letter as Chairman.
A company’s success consists not merely of how much capital it can accumulate while its founder is at the helm, but whether it can preserve what made it unique once the founder is no longer there. Buffett appears to have reached that conclusion after more than six decades.
The man who turned patience into an investment strategy ultimately faces his own ultimate long-term test: handing over control and trusting that time—which inevitably ends all individual leadership—will not also bring an end to the philosophy he built.
T. Rowe Price, a global investment management firm, has announced the addition of the T. Rowe Price Securitized Income ETF to its product suite. The new fully transparent, actively managed fixed income exchange-traded fund (ETF) has begun trading on the NYSE Arca.
The T. Rowe Price Securitized Income ETF is designed for investors seeking to enhance periodic portfolio returns while diversifying fixed income exposure beyond traditional corporate and government bonds. Actively managed and backed by the firm’s fundamental research capabilities, TSCZ seeks to generate high current income through a portfolio diversified across U.S. securitized credit sectors, such as asset-backed securities (ABS), commercial mortgage-backed securities (CMBS), collateralized loan obligations (CLO), and non-agency residential mortgage-backed securities (RMBS). TSCZ carries a total expense ratio of 0.20%.
TSCZ is actively co-managed by Jean-Marc Breaux, CFA®, and Ramón de Castro. Breaux is Head of Securitized Products in the Fixed Income division and brings 20 years of investment experience, eight of them at T. Rowe Price. De Castro is a sector portfolio manager in the Fixed Income division with over 30 years of experience, 14 at the firm. He also serves as portfolio manager for the T. Rowe Price GNMA Fund (Ticker: PRGMX) and oversees residential mortgage-backed securities (RMBS) allocations across several multisector fixed income portfolios.
With this addition, T. Rowe Price’s ETF lineup expands to 35 total funds, spanning fixed income, equity, multi-asset, digital assets, and thematic strategies. Each ETF solution brings key advantages such as tax efficiency, competitive expense ratios, and the flexibility to buy and sell shares throughout the trading day. All funds leverage the rigorous fundamental research of T. Rowe Price’s analysts and portfolio managers, focused on asking better questions to deliver better client outcomes.
Separately, T. Rowe Price recently announced an agreement to acquire F/m Investments LLC, a specialized fixed income and ETF asset manager. Expected to close in early 2027, the transaction will increase its fixed income assets under management by nearly 9%, more than double its volume in fixed income ETFs, and expand its separately managed accounts (SMA) business. Alongside today’s launch, this transaction reflects the firm’s ongoing commitment to expanding its fixed income ETF capabilities and diversifying the suite of solutions available to its clients.
Janus Henderson has announced the launch of the Janus Henderson International Core Alpha ETF, an actively managed exchange-traded fund designed to seek long-term capital growth by investing in international equities. The product will trade on the U.S. Nasdaq exchange.
JINT expands the same SystemActive investment framework used across Janus Henderson’s ETF suite—including U.S. small-cap (JSML), small/mid-cap (JSMD), and mid-cap (JMID)—into international markets. The strategy combines fundamental research with proprietary investment signals to systematically identify stocks with attractive expected return profiles while actively managing portfolio risk.
Managed by Benjamin Wang and Zoey Zhu, JINT broadens Janus Henderson’s active ETF offering, providing access to a core international equity strategy backed by the firm’s established expertise in quantitative investing.
For advisors and investors seeking international equity exposure, JINT is designed to serve as a core building block that combines systematic stock selection, active risk management, and the transparency inherent to the ETF structure.
“The launch of the Janus Henderson International Core Alpha ETF reflects our commitment to providing investors with innovative active ETF solutions,” stated Wang, adding that “by leveraging our systematic investing expertise and applying it to international equities, we seek to drive efficiency, enhance diversification, and deliver more alpha over time.”
“What sets this strategy apart is the combination of fundamental insights, proprietary alpha factors, and explicit risk management within a transparent, repeatable framework,” noted Zhu, who believes this approach “positions us to capture attractive opportunities across international markets while maintaining a consistent investment process.”
Artificial intelligence (AI) has become a recurring topic of discussion with investment firms. When asked whether we have reached the peak of investment in this theme—from both fixed income and equity perspectives—they insist we have not. They argue that there is still room and investment opportunities left within the AI universe, even following warnings from key industry figures—such as Dario Amodei (CEO of Anthropic), Sam Altman (CEO of OpenAI), and Elon Musk (xAI)—regarding the need to slow down development due to safety risks.
The impact of the current wave of investment in artificial intelligence could exceed $20 trillion. According to Capital Group, tech megacap capital expenditure is accelerating at a rate that could eclipse China’s industrialization process, referencing a benchmark of reaching $30 trillion by 2032.
“There is no doubt that artificial intelligence is becoming one of the primary drivers of economic activity. However, it should not be understood solely as a technology theme, but as an investment cycle with broad implications for the economy as a whole. The artificial intelligence ecosystem spans multiple levels, from semiconductor design and software development to power supply, infrastructure construction, and sectors integrating the new technology into their operations, such as media and financial services,” they note.
Debate or Marketing?
This massive investment opportunity has coincided in recent days with suggestions to moderate the pace of technological development, which had a slight impact on semiconductor companies while favoring software firms. “Leading model developers have little incentive to voluntarily slow down a technology they view as strategic, especially when Chinese competitors are just six to eight months behind,” according to Banca March.
This debate, combined with a higher interest rate outlook, could, according to Banca March’s latest analysis, “become the perfect backdrop for a temporary pullback in equity markets.” However, the firm’s experts downplay the concern, noting that “the narrative surrounding a potential slowdown in AI development seems to reflect an institutional marketing strategy ahead of two of the largest IPOs in history rather than an operational reality.”
“Competition in this space is extraordinarily intense, global, and decentralized, making any coordination attempt among primary players extremely difficult. Even more so when the Trump administration has been openly opposed, ruling out government interventions in the sector,” they add.
In the view of Flavien del Pino, Head of BDL Capital Management for Spain, the recent correction in tech companies most exposed to AI is not merely a cyclical market movement, but reflects a fundamental doubt regarding the actual profitability of this technology.
“Hyperscaler spending is accelerating to unprecedented levels and is destroying free cash flow generation, accumulating debt that will approach $2 trillion. To justify the $7 trillion that will be invested in data centers through 2030 with a return on capital employed (ROCE) of just 10%, the sector would need to generate $3.6 trillion annually in new revenues—a figure higher than the entire current global market for software and IT services,” he explains regarding the resulting capital return uncertainty.
Brakes on Investment
So, is there any factor that could genuinely stall AI investment? According to experts, a key issue will be national regulations—specifically, the outlook for AI regulation in the United States and potential restrictions on data center development. In the view of Libby Cantrill, Head of Public Policy at PIMCO, while the U.S. Congress may begin to focus more intensely on AI safety and federal government involvement appears inevitable at some point, “we are unlikely to see a comprehensive federal regulatory framework enacted into law in the near term.” Looking ahead to the next Congress, she notes there will likely be greater scrutiny on the issue, though “for now, AI regulation does not appear imminent.”
In the absence of federal progress, Cantrill believes “states are likely to continue moving forward with AI safety legislation” and taking the lead on data center restrictions. In this domain, municipalities in 32 states have already moved forward with moratoria, and up to 26 states are currently considering statewide moratoria.
Against this backdrop, Cantrill anticipates that “in 2027, given the political landscape, we could see greater friction in AI infrastructure development, with a likely widespread increase in data center construction costs” and, in some cases, states opting to halt them entirely. This would imply, she concludes, “a more complex patchworks for both companies and investors.”
Implications for Investors
From an investor’s perspective, Andrew Heiskell, Equity Strategist at Wellington Management, and Brian Barbetta, Global Industry Analyst at Wellington Management, consider that the debate is no longer centered on whether AI is relevant, but on a more complex question: which links in the ecosystem will capture the value generated?
“In such a dynamic environment, long-term technological progress and short-term public market expectations are unlikely to move at the same pace. Instead, we should expect continued moments where investor sentiment overvalues or undervalues shifting business and technological realities,” hold both Wellington Management experts.
Their position is that investing in the constantly evolving AI universe requires not only stock selection, robust analytical capabilities, and top-tier active management, but also a comprehensive understanding of its ecosystem, which can offer investors greater composure amid market volatility and ambiguity. “Simply diversifying across a basket of AI-exposed stocks is unlikely to capture the full potential of this unique and transformative technology. Conversely, active managers with strong analytical capabilities who recognize that leadership will rotate as technology evolves and market conditions change will be better positioned to generate returns and manage risk in this new AI era,” they argue.
Furthermore, for investors, it is becoming increasingly difficult to avoid tech megacaps altogether, given their weight in global equity benchmarks and their critical role in driving productivity, innovation, and economic growth. However, “investors do not need to concentrate their exposure in a handful of U.S. large-cap companies to participate in long-term digitization and artificial intelligence trends,” warns Yan Taw Boon, Head of Thematic Strategies for Asia at Neuberger.
In his view, one of the most important current developments is that the AI infrastructure boom is broadening beyond technology itself. “Capital is increasingly flowing into sectors such as energy, construction, industrial automation, and the manufacturing of specialized components required to build and operate AI data centers. This creates a broader set of opportunities for investors seeking exposure to AI-driven growth while reducing reliance on a small group of dominant tech stocks,” the Neuberger expert explains.
For Taw, diversifying exposure across geographies, sectors, and market capitalizations will be essential so that “investors can participate in the structural growth of the tech sector while mitigating concentration risk.”
After building its operation around access to international investments for Brazilians, Avenue is preparing a new stage of expansion. The platform wants to broaden the range of services offered to clients and advance into offshore banking products, starting with the launch of a credit card issued in the United States.
The strategy was detailed by Roberto Lee, founder of Avenue, in a conversation with Funds Society Brasil. According to the executive, the company—which has Itaú as its majority partner—perceived that the financial internationalization of Brazilian families is no longer limited to investment diversification and has begun to encompass broader aspects of daily life.
“What we actually discovered is that it doesn’t end there. Brazilian families connecting to the outside world start with investments, but expand their journey into a life journey,” says Lee.
In the Avenue founder’s assessment, this movement appears mainly on three fronts: international education, real estate acquisition, and Brazilians working or receiving income from abroad.
“We have seen in our client base, but also around us, across the entire market, incredible growth in family planning for international education,” he said. “It is a massive journey of Brazilians starting to own real estate abroad. Their first properties, and it is no longer something reserved for very wealthy families. It has already penetrated the high-income segment.”
This shift helps explain Avenue’s next step. If the company’s first phase was concentrated on connecting the Brazilian investor to the international market, the intention now is to accompany the client in other financial needs that arise outside the country as well.
“Our goal is to make a vision we have a reality: to make it as natural for Brazilians to use banking services abroad as they do in Brazil,” he says.
For Lee, a gap exists precisely in this process. While investors in Brazil already find institutions and professionals capable of helping them build an international portfolio, other needs related to living abroad still require families to navigate much of the path on their own.
“They are already connected to the Brazilian system, but across all these other journeys, they become invisible to the Brazilian system. And they have to walk that path alone,” he states.
U.S. Credit Card Still in 2026
One of the first products of this new phase is expected to be Avenue’s credit card. Lee stated that the expectation is to start issuing the first cards to clients later this year.
“It will be an Avenue card. I hope that this year we will begin issuing the first credit cards to our clients.”
According to the executive, the card will be issued and settled in the United States. “It is an American card, operated by a Brazilian company,” he summarizes.
The ambition, however, does not stop at the card. Asked about the possibility of Avenue offering Brazilians access to loans in the U.S. market in the future, Lee said that this is one of the paths the company intends to pursue.
“That is where we are working toward. We are still far, but that is our goal.”
The strategy does not mean, in the executive’s view, simply transforming Avenue into a bank. For Lee, a banking license is only one piece of the infrastructure needed to build a broader service offering abroad.
“A bank is basically a license. I think it’s not about that,” he stated. In this context, the founder highlights the structure of Itaú, Avenue’s controlling shareholder. According to Lee, the group’s presence in different jurisdictions gives the platform access to core structures for this operation.
“It is obvious that we enjoy the privilege of having a controlling majority partner that is Itaú, which manages to have very sophisticated, deeply rooted licenses with human, regulatory, and infrastructure capital in several jurisdictions, including the United States,” says the CEO, noting also that the parent company recently received preliminary authorization to establish a nationally chartered bank in the United States.
Real Estate, Education, Insurance, and Credit
Avenue also sees opportunities in services associated with real estate purchases, international education, and insurance.
Lee’s proposal is that part of this service can continue to be provided directly from Brazil, even when the financial product or service is abroad.
“Our vision is that whoever helps you, just like whoever helps you invest abroad today, will be here in Brazil. Those who will help you get a mortgage, student financing, or insurance for the property you bought abroad will be Brazilian professionals.”
According to him, this involves building an ecosystem that extends beyond Avenue’s own boundaries. The executive cites, for instance, Brazilian real estate agencies expanding their international presence and educational institutions preparing students for foreign universities.
Avenue aims to act as a catalyst for this movement.
“We try to be the catalyst and leadership agent in this,” Lee said. “The leader isn’t just who is the biggest, who makes the most money, or who serves the most clients. The leader is the one who paves the way.”
For the executive, the trend that turned international investing from a product restricted to wealthy families into a broader movement is now appearing in other dimensions of cross-border wealth management.
Lee points to the real estate market as an example. “Brazilians are the third largest buyers of real estate in Florida. The average ticket size keeps dropping. It is no longer reserved for very wealthy families, just as investing abroad is no longer reserved for very wealthy families.”
The digital revolution underway includes a process that promises to be revolutionary for the industry: the tokenization of assets, including ETFs. This is a process by which shares of a traditional exchange-traded fund are converted into unique digital tokens on a blockchain network. Each token represents a fraction or the entirety of the underlying ETF’s value and maintains direct backing.
At State Street, they recall that the ETF sector has been characterized by improving access, transparency, liquidity, and efficiency for both investors and issuers, and that, therefore, tokenization should be considered as “the next step in that evolution,” in addition to the “real” possibility that, as a “wrapper,” it could end up being the optimal choice for investment solutions.
A similar opinion is expressed by Laure Peyranne, Head of ETF for Iberia, Latin America & US Offshore, who asserts that the tokenization of ETFs could “add a new layer of efficiency” to a vehicle that already stands out for its liquidity, transparency, and scalability. In short, it could represent a significant evolution in the fund industry’s infrastructure, “beyond a simple change in product format,” and rather than replacing the traditional ETF structure, “it can contribute to its evolution toward a more digital, automated model connected to new distribution systems.”
Meanwhile, Dovile Silenskyte, Director of Digital Assets Research at WisdomTree, clarifies that tokenization will not alter the economic exposure of an exchange-traded fund, but it could modernize the infrastructure through which ETF shares are issued, transferred, settled, and managed. “Currently, the post-trade process involves multiple parties, each maintaining records and reconciling positions. Tokenization has the potential to create a more synchronized record of ownership and automate elements of this process,” she notes, highlighting that, in practice, “the short-term model is likely to be hybrid: regulated market infrastructure will remain fundamental, while distributed-ledger technology will improve specific workflows.”
The Benefits
The future tokenization of ETFs will bring advantages for investors as well as for the broader industry. In this regard, Peyranne points out that tokenization can facilitate greater accessibility to certain investment vehicles by enabling fractional ownership, with the resulting reduction in minimum access amounts. “It can also contribute to greater operational efficiency by allowing more agile and transparent property records and transfers. It could even enable new functionalities for certain investor profiles, such as using tokenized assets as collateral, provided regulatory frameworks permit it,” she states.
Silenskyte, for her part, sees it as feasible that ETF tokenization will mean fewer manual processes, less need for reconciliation, lower management costs, and greater visibility of distribution activity for issuers. She even ventures to predict the possibility that tokenization could create a new gateway to the market, offering issuers a way to present diversified investment products to digital-native investors who currently “hold a substantial portion of their assets in highly volatile crypto-assets.”
At State Street, they point out that tokenization opens the doors to expanding investor access, broadening ETF distribution, and reducing operational friction. For investors, the firm notes, tokenization could make ETF shares more transferable and easier to utilize through digital wallets, including in collateral, treasury, and financing applications.
Initial Phase
The future holds great opportunities for the ETF industry, but the fund tokenization process still has a long road ahead. Peyranne notes that, according to estimates, tokenized funds in the market stand at around $30 billion to $35 billion, including money market funds, credit funds, and other investment strategies.
“Momentum is building, as many of the world’s largest asset managers and market infrastructure providers are actively investing in tokenized fund initiatives,” State Street points out, though the firm notes that ETF tokenization remains in an initial phase. “The next stage will consist of proving demand from institutional investors, interoperability with existing market infrastructure, and quantifiable improvements in distribution and efficiency,” they explain.
Silenskyte reveals that the sector has moved beyond the proof-of-concept phase, and tokenized funds are already operational across several jurisdictions, with major asset managers and market infrastructure providers allocating capital to this technology. However, she is aware that large-scale adoption remains far off, citing technical limitations as well as hurdles such as the legal treatment of digital securities, platform interoperability, integration with existing custody and settlement systems, the availability of institutional-scale tokenized cash, and consistent cross-border regulation.
In her view, the next phase of the process will determine whether tokenization “becomes a significant enhancement to the ETF operating model or remains a collection of isolated digital structures.”
