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“The Surge in Active ETFs Has Not Diminished Demand for Low-Cost, Plain-Vanilla ETFs”

Photo courtesyMatthew Bartolini, Global Head of Research Strategists at State Street Investment Management

Plain-vanilla, low-cost ETFs and active ETFs can play complementary roles in portfolios to maximize returns. That is the view of Matthew Bartolini, Global Head of Research Strategists at State Street Investment Management, who analyzes the latest investment flows into exchange-traded funds in an interview with Funds Society. Bartolini believes that long-term demand for core ETFs is widespread, adding that looking ahead, “any further fee reductions will likely depend on scale, operational efficiency, and asset growth.”

In the first half of 2026, inflows into ETFs exceeded $1 trillion, putting annual inflows on track to top $2 trillion. During this period, one out of every two dollars invested in ETFs (49%) went to low-cost ETFs—the category of funds upon which the ETF industry was built.

Investment inflows into low-cost ETFs remain exceptionally solid despite the surge in actively managed ETFs. What is driving this continued interest in these products?

Core low-cost ETFs remain foundational building blocks in portfolio construction for investors. They offer transparent, diversified exposure to key asset classes and market segments at a very low cost, making them effective strategic allocations within portfolios.

Their combination of broad market exposure, operational simplicity, and cost efficiency continues to resonate across a wide range of investors. These attributes also contributed to the State Street S&P 500 SPDR Portfolio ETF (SPYM) being selected as a default investment option within the new “Trump Accounts” program, expanding ETF adoption to a new generation of investors.

It is worth noting that this long-term demand is widespread. Advisors, institutions, model portfolio providers, and retirement-focused investors are increasingly turning to low-cost ETFs as efficient tools for portfolio construction, implementation, and long-term wealth accumulation.

How are low-cost ETF providers adapting their product lineups to this environment marked by the boom in active management?

The surge in active ETFs has not diminished demand for low-cost, plain-vanilla ETFs. Investors increasingly view them as complementary tools: low-cost ETFs provide efficient market exposure as the core of the portfolio, while active ETFs are used to pursue specific objectives, such as income generation, risk management, or alpha generation.

Regarding our solutions within our ETF lineup, the goal is to ensure we have a robust platform that includes both low-cost and active exchange-traded funds, enabling complementary uses. And that aligns with how investors construct their portfolios.

For instance, a typical portfolio might use broad-market, low-cost equity and fixed income ETFs as a foundation, then overlay active strategies to generate income, manage risk, seek alpha opportunities in less efficient markets, or execute a specific, granular thematic investment thesis.

The reality is that investors are increasingly adopting both active ETFs and low-cost index-based ETFs, deploying each for the function it performs best within the portfolio. In some cases, we see low-cost index exposures being used actively to build more customized allocations that align with a portfolio’s risk tolerance or a broad macroeconomic outlook.

This is most prevalent in fixed income, where strategies exist that break down overall macroeconomic betas into different maturities within U.S. Treasury or U.S. corporate bond markets to balance yield and duration profiles with greater precision.

Is there scope in the industry to continue reducing ETF fees?

Many core beta exposures are already priced exceptionally low, although the industry continues to see periodic fee reductions. Looking ahead, any further fee reductions will likely depend on scale, operational efficiency, and asset growth.

Which types of low-cost ETFs are currently generating the greatest interest among investors?

Broad equity exposures have captured the lion’s share of low-cost flows year-to-date. Seventy percent of low-cost flows in 2026 have gone toward equity exposures (+$381 billion), with 70% of that total (+$291 billion) funneled into low-cost ETFs focused on U.S. equity markets.

This trend reflects the efficiency of broader equity markets and investors’ ongoing desire to access core market beta at a low cost. It also helps explain why active managers tend to focus on areas where they believe there are greater opportunities to generate alpha—for example, ex-U.S. markets.

The picture is somewhat different in fixed income. Active fixed income ETFs have captured a larger share of flows than would be expected based on their market share of assets under management, with active fixed income attracting approximately 42% of flows versus 31% of assets.

The opposite is true for low-cost fixed income ETFs, which account for 57% of flows despite comprising 69% of fixed income ETF assets. This suggests that investors are increasingly turning to active managers to help enhance yield opportunities while managing interest rate, credit, and macroeconomic uncertainty across bond markets.

Ardian Reorganizes Its Shareholding Structure with AXA’s Exit and Increased Stakes for ACM and Wafra

| By Amaya Uriarte | 0 Comentarios

Ardian, the global private markets investment firm, has announced the signing of a share purchase agreement under which Assurances du Crédit Mutuel (ACM) and Wafra, two existing shareholders in its capital, will increase their respective stakes in the company. As part of this transaction, AXA will sell its 10% holding in Ardian, subject to customary closing conditions and regulatory approvals.

Following this investment, ACM’s stake in Ardian will rise to 23%, while Wafra will also expand its investment after acquiring an initial minority stake in 2025. Both shareholders will increase their positions by exercising pre-emption rights available to them as existing shareholders. Meanwhile, Ardian’s employees will remain the primary shareholder group, controlling approximately 40% of the firm’s capital.

Concurrently, AXA will continue its long-standing relationship with Ardian as one of the primary investors in its funds. The transaction is expected to close between late 2026 and early 2027.

“AXA has been our partner since day one, when Claude Bébéar asked me to create a private equity firm in 1996 and Ardian—then AXA Private Equity—was born. I am delighted to see that this 30-year partnership will continue to strengthen through AXA’s renewed trust in our strategy through its investments as a client, alongside the growing support of our diversified international shareholder base,” explained Dominique Senequier, founder and CEO of Ardian.

Mark Benedetti, co-CEO of Ardian, highlighted: “Opportunities to acquire shares in Ardian arise very rarely, and demand consistently exceeds supply. The increased stakes from ACM and Wafra, together with AXA’s ongoing commitment as one of our major clients, represent a strong endorsement of the business we have built over the past three decades and our current position as a global investment firm with $200 billion in assets under management. We look forward to continuing to create sustainable value for all of our shareholders.”

Finally, Patrick Thomas, Chairman of the Supervisory Committee at Ardian, added: “We are pleased to see the continued commitment of our existing shareholders through this agreement. The transaction further strengthens our international shareholder base while preserving the long-term governance model and corporate culture that remain the foundation of Ardian’s success.”

What the Return of a Blockade in the Strait of Hormuz Means?

| By Amaya Uriarte | 0 Comentarios

The reactivation of the naval blockade and the sudden escalation of military tension in the Strait of Hormuz have shattered expectations of a short-term agreement with Iran, immediately rattling financial and institutional markets. According to the latest Middle East Weekly Tracker report published by Natixis Corporate and Investment Banking (CIB) and authored by economists Alicia García Herrero and Jeremy Ji, the surge in war risk is already translating into sharp upward pressure on oil, widespread losses across Gulf equities, and rising sovereign risk premiums.

Impact on Equities and Institutional Investment Flows

Gulf Cooperation Council (GCC) stock markets have reacted downward to the return of geopolitical uncertainty. Dubai equities in particular recorded a decline of around 1.5% in the week prior to July 15, penalized by their high commercial, tourism, and financial exposure to physical disruptions in the Strait.

Furthermore, the Natixis CIB report notes a detrimental shift in cross-border capital behavior. As stated in their report: “Foreign flows remained mildly negative, with a net outflow of $11 million from Dubai and Saudi equity markets last week. With the blockade back, these capital outflows are more likely to increase rather than reverse.”

Crude at $85 and Stress in Credit Markets (CDS)

The paralysis of this key maritime route for international trade has driven commodities significantly higher. Brent crude futures scaled to $85 per barrel on July 16, reacting to the U.S. Navy’s re-establishment of the blockade on Iranian ports and the closure of Hormuz decreed by Iran’s Islamic Revolutionary Guard Corps (IRGC).

In the fixed income and credit derivatives markets, 5-year Credit Default Swap (CDS) spreads for GCC nations have widened noticeably. Analysts at the French institution highlight that Bahrain continues to be the sovereign adjusting upward most rapidly—increasing its cost of hedging against default—due to its status as host to U.S. bases, which directly exposes it to absorbing Iranian retaliation.

Graph taken from the Natixis Report. Source: Natixis, Bloomberg, and LSEG

Activity Collapse in the Real Economy

The physical impact of the conflict is already fully quantifiable in freight transport data compiled by Natixis. Daily vessel traffic through the Strait of Hormuz has suffered a severe collapse, plummeting to just 12 commercial ships on July 13, compared to the 25 recorded barely a week earlier. Conversely, scheduled and monitored flights at Dubai and Doha airports show minimal variation, confirming that, for now, direct economic damage remains almost exclusively concentrated in maritime transport.

The report details a succession of critical events occurring between July 11 and July 16, 2026, including direct attacks on United Arab Emirates tankers and targeted bombardments by allied forces. For the firm, political resistance to withdrawing troops from conflict zones and the lack of consensus over the control of shipping routes will keep any definitive short-term agreement completely stalled, shaping a volatile landscape that global fund managers and emerging market investors will need to monitor closely in the coming weeks.

Graph taken from the Natixis Report. Source: Natixis

ETFs versus Mutual Funds: Who Is Winning the War on Costs and Flows

| By Amaya Uriarte | 0 Comentarios

The battle between exchange-traded funds (ETFs) and traditional mutual funds long ago ceased to be a competition over performance. Today, the real battleground is costs, and on that field, ETFs are expanding an advantage that is beginning to redefine the global asset management business.

Figures show that competitive pressure has pushed expense ratios for numerous ETFs to historic lows, to the point where some products charge merely between 0.02% and 0.03% annually. There are even ETFs with a 0% management fee, used by some managers as a tool to attract new clients toward other higher-margin services.

The consequence is visible in investment flows. While ETFs continue to capture the vast majority of new money entering the industry, mutual funds continue to lose ground, especially among institutional investors, financial advisors, and new generations of savers who consider cost to be one of the primary determinants of long-term performance.

A Difference of a Few Basis Points That Moves Trillions

Fee reductions may seem marginal to an individual investor, but when managing a portfolio over decades, a few tenths of a percentage point represent thousands of dollars in additional wealth.

Precisely for this reason, the industry is experiencing a true price war. According to Morningstar, the asset-weighted average cost of U.S. investment funds continues to decline and sits at historically low levels, driven primarily by the growth of passive vehicles and low-cost ETFs.

For example, the market’s largest index ETFs currently charge remarkably low fees:

Vanguard S&P 500 ETF (VOO): 0.03%
iShares Core S&P 500 ETF (IVV): 0.03%
SPDR Portfolio S&P 500 ETF (SPLG): 0.02%

Even certain ETFs specialized in fixed income or international markets have significantly reduced their fees over the past five years to compete for asset volume. In contrast, the average cost of many active mutual funds continues to range between 0.50% and over 1.00% annually, depending on the strategy and market, although competitive pressure has also forced numerous managers to lower their rates.

Investment flows clearly reflect where investor preference is shifting. According to ETFGI, the global ETF industry already manages more than $17 trillion in assets, setting new historic highs during 2026.

In the United States, the world’s largest market, assets exceed $15.7 trillion, while net inflows continue to break records. In contrast, although the mutual fund industry remains considerably larger in managed assets, much of its recent growth stems from market appreciation rather than new capital inflows. Investors are prioritizing cheaper, more liquid, and more tax-efficient vehicles.

Major Managers Can Charge Less… Because They Manage So Much More

Paradoxically, the price war is strengthening the world’s largest managers. Firms such as BlackRock, Vanguard, and State Street have managed to convert massive growth in assets under management into economies of scale that allow them to keep lowering fees without sacrificing corporate profitability.

BlackRock currently manages around $13 trillion, Vanguard exceeds $11 trillion, while State Street Global Advisors hovers around $5 trillion. Combined, these three giants manage nearly $29 trillion, an unprecedented concentration in the history of asset management.

This massive scale makes it possible to operate products with extremely low fees while continuing to generate growing revenues thanks to the overall volume managed.

Active Funds Respond with New Strategies

As a consequence of this war and the pressure on fees, traditional managers are being forced to modify their value proposition. More and more managers are shifting their growth toward segments where price competition is lower: private markets, private credit, infrastructure, real assets, alternative strategies, and personalized wealth management.

At the same time, many firms are converting former mutual funds into ETFs—a trend that has accelerated since 2023 and continues to gain momentum in the United States due to the operational and tax advantages of the ETF format.

The War Has Just Begun

Various analysts believe that the pressure on fees will continue to intensify. The growth of index investing, the expansion of automated management, the rise of artificial intelligence applied to portfolio construction, and investors’ increasing sensitivity to costs will continue to favor ETFs.

For active mutual funds, the challenge no longer consists solely of outperforming benchmark indices, but of demonstrating that the added value of active management justifies paying several times more in fees.

In an industry where managing trillions of dollars has become a business of ever-narrowing margins, the great paradox is that never before has so much money been managed while charging so little. And, for now, ETFs are winning that battle.

Tax Optimization Becomes the New Battleground for Wealth Manager Differentiation

| By Amaya Uriarte | 0 Comentarios

Tax optimization is rapidly becoming the new battleground for wealth manager differentiation. After decades spent trying to improve their stock-picking capabilities, managed account sponsors have largely decided that it is time to take tax optimization seriously, according to The Cerulli Report—U.S. Managed Accounts 2026. For the second consecutive year, “enhancing tax management capabilities” stands as the single most important priority for platform sponsors by a wide margin. In fact, 76% of sponsors identify tax management capabilities as a key focus of development, followed by 42% who cite the incorporation of illiquid product options.

“The implementation and adoption of tax management capabilities is likely to have a more obvious and profound impact on client portfolios,” states Scott Smith, senior director. “While stock selection is weighed down by the reality that ‘past performance is no guarantee of future returns,’ tax optimization capabilities offer a far more reliable source of post-tax alpha,” Smith emphasizes.

With several firms offering integrated optimization features and the consolidation of unified managed household (UMH) platforms becoming a reality, platform sponsors that have failed to make significant strides in tax optimization face a severe competitive disadvantage. Regarding where firms stand in this environment, the director warns: “Firms in this position must evaluate their current status and immediately implement a platform development strategy before advisors and clients begin transferring their assets to providers that allow them to maximize their post-tax net worth.”

Looking ahead, wealth managers will need to ensure that tax optimization capabilities are so seamlessly integrated into advisor workflows that choosing not to adopt them becomes the more costly path. “Advisors who are resistant to change may jump on the bandwagon once they realize it is the path of least resistance; moreover, their clients will benefit and potentially gain a clearer understanding of the value their advisors bring,” Scott concludes.

AEW Names Bianca Kraus Head of Investor Relations for Europe

| By Amaya Uriarte | 0 Comentarios

AEW, an affiliate of Natixis IM, has announced the appointment of Bianca Kraus as Head of Investor Relations Europe, effective July 1, 2026. Bianca is based in Munich and will report to Vanessa Roux-Collet, Chief Executive Officer (CEO) of AEW in Europe.

As highlighted by the firm, Bianca joined AEW in 2019 as Head of Investor Relations for Germany, and since 2023 she has been leading the company’s investor relations for the entire DACH region, where she was responsible for building and maintaining relationships with institutional investors and consultants in Germany, Austria, and German-speaking Switzerland. Bianca has raised capital for AEW’s global platform, securing segregated account mandates on behalf of institutional investors and raising capital for the manager’s flagship funds.

In her new role, Bianca will lead AEW’s European investor relations team, supervising capital raising and client servicing for the firm across Europe. Bianca will work in close collaboration with Vanessa Roux-Collet to execute AEW’s European growth strategy, while ensuring continuity of service for existing clients.

Bianca joined AEW from BNP Paribas REIM Germany, where she served as Head of Client and Fund Relations, and brings nearly 30 years of experience in real estate investment management, having spent the last fifteen years in executive roles within investor relations.

Vanessa Roux-Collet, CEO of AEW in Europe, commented that investor relations are an integral part of their business strategy and that Bianca has played a fundamental role in creating and consolidating strong relationships with institutional investor clients over the last seven years. She noted that Bianca’s promotion to Head of Investor Relations Europe is a natural step, and expressed enthusiasm for working with her to ensure continued exemplary client service and to focus on growing the business.

Bianca Kraus, Head of Investor Relations Europe at AEW, added that after leading AEW’s investor relations in the DACH region over recent years, she is excited to expand her responsibilities across Europe alongside their top-tier team. She stated that the firm has a clear growth strategy that leverages expertise across key conviction themes where they possess deep knowledge and can offer clients attractive investment opportunities.

AFOREs: More Capacity to Invest, But Where Are the Local Opportunities?

| By Beltrán | 0 Comentarios

Mexico’s AFORE pension funds have more regulatory capacity than ever to invest in alternative assets. The challenge is no longer capital availability—it is the supply of institutional-quality investment opportunities capable of absorbing long-term pension capital. This shift has important implications for both Mexico’s private markets and international alternative asset managers, particularly those active in private equity, secondaries, private credit, infrastructure, real estate, and other private market strategies. Under the current regulatory framework, AFOREs may allocate up to 30% of their portfolios to structured assets. The framework has evolved significantly over the past two years.

While the original 20% allocation remains predominantly internationally oriented, regulators approved an additional 10% allocation in October 2024 with a much stronger domestic focus. In practice, this means that roughly two-thirds of the total capacity remains available for international investments, while approximately one-third is intended to support local opportunities. The objective is to strengthen financing for the Mexican economy while preserving the global diversification that AFOREs have developed over the past decade. If successful, the new framework could channel additional capital toward infrastructure, energy, real estate, private credit, and other sectors capable of generating long-term economic growth.

As of April 2026, AFOREs managed approximately US$500.2 billion in assets. They held roughly US$39.3 billion in private equity investments at market value, representing 7.8% of assets under management. When unfunded commitments are included, my own estimates suggest total exposure to alternative assets reaches approximately 16.6%—already approaching the original 20% regulatory threshold. The challenge, however, goes well beyond expanding regulatory limits.

AFOREs need more than attractive projects. They require institutional investment platforms with experienced management teams, strong governance, proven execution capabilities, proven exit track records, and the operational scale necessary to deploy hundreds of millions of dollars efficiently. In today’s more selective environment, demonstrated liquidity generation and realized returns have become just as important as the underlying investment opportunity. The same discipline applies to international investments. Over time, AFOREs have increasingly concentrated commitments with global managers that possess institutional-scale organizations, deep investment teams, and long-established track records.

Paradoxically, although regulatory capacity for alternative investments has expanded, actual portfolio allocations have not followed the same path. Combined exposure to CKDs (Mexico’s domestic private markets vehicles) and CERPIs (vehicles primarily used for international private market investments) declined from approximately 8.9% of portfolios in December 2024 to around 8.3% by the end of April 2026.

More importantly, the composition of those investments has changed considerably. In 2024, allocations were almost evenly split between domestic and international strategies. Based on my estimates as of March 2026, international exposure has increased from approximately 4.5% to 5.3%, while domestic exposure has declined from about 4.4% to roughly 3.0%. This shift should not necessarily be interpreted as a growing preference for international assets. Rather, it reflects the limited availability of domestic investment opportunities capable of absorbing institutional capital at scale.

Since 2024, issuance of Trust Stock Certificates (CEBURs) has accelerated, broadening access to private equity strategies for insurance companies, private banks, and other institutional investors through exchange-listed vehicles. These instruments complement the investment structures traditionally used by AFOREs—namely CKDs and CERPIs—and reflect the continued evolution of Mexico’s private markets ecosystem.

Ultimately, Mexico has largely addressed the regulatory side of the equation. The next stage will depend on whether the domestic private markets ecosystem can consistently generate investment opportunities with the scale, governance, quality, and risk-return profile required by institutional investors. Regulation can create investment capacity, but only a robust pipeline of institutional-quality opportunities will translate that capacity into higher allocations to Mexican alternative assets.

Opinion column by Arturo Hanono, Senior Advisor in Mexico for Alpine Capital Advisors

Buried Gold on Both Sides of the Atlantic: The Little-Known Path to Claiming Social Security Benefits in Spain and the United States

| By Amaya Uriarte | 0 Comentarios

Pirate stories of buried treasure in remote places have captured the imagination for centuries. Americans who have worked in Spain and Spaniards who have worked in the United States might not be digging holes on tropical islands, but they could also be sitting on a treasure that has gone unnoticed.

That treasure is the retirement pensions to which we might be entitled in the United States or in Spain. We might think that we haven’t contributed to Social Security for enough years to qualify for a pension in the United States (generally 40 credits, equivalent to about 10 years of work). Or we know that we haven’t worked long enough in Spain to access a pension (normally at least 15 years of contributions). Fortunately, this does not mean that the contributions we have accumulated are left “abandoned” on a deserted island. Thanks to a treaty between the United States and Spain known as the Social Security Totalization Agreement, we can combine contribution periods from both countries to meet the minimum eligibility requirements.

Best of all, the Totalization Agreement works in both directions. We can use contributions made in Spain to qualify for Social Security benefits in the United States, or use contributions made in the United States to access benefits in Spain. When a professional career spans both countries, it is easy to fall short of the minimum requirements in each. The agreement resolves this issue by allowing work periods to be added together so those years are not lost. In a way, it is a modern-day treasure map.

Both Spain and the United States review the combined contribution record to determine whether we meet eligibility criteria. However, just as pirates divided their loot according to a strict code, Social Security benefits are also distributed under very precise rules. Each country pays its portion separately:

United States Benefits: The United States can take into account contribution periods in Spain to help us meet minimum eligibility requirements. If we gain entitlement through this mechanism, the benefit will be proportional and calculated solely on the basis of our work history in the United States.
Spain Benefits: Spain can credit contributions made in the United States to help us meet the minimum required period and will subsequently pay a proportional pension based exclusively on contributions made in Spain.

This does not mean that both systems merge into a single benefit. Each country pays exclusively its own corresponding share. Contributions are combined solely to establish eligibility, not to increase the payout amount. Contribution periods are not transferred from one country to another; they remain within the system where they were generated and are simply recognized by the other state.

In other words, while contributions can be aggregated to satisfy eligibility thresholds, the actual amount of each benefit will depend solely on the years worked in each respective country. For example, if we have worked 6 years in the United States and 11 years in Spain:

The U.S. benefit will be calculated solely on those 6 years of U.S. contributions.
The Spanish pension will be based exclusively on the 11 years of contributions made in Spain.

Each country will pay its proportionate share: we will not receive an extraordinary windfall, but neither will we lose the contributions we worked so hard to accumulate. The key lies in ensuring we meet the minimum thresholds—at least 6 U.S. credits (roughly one and a half years of work) and at least one year of contributions in Spain—to be eligible for the treaty’s provisions when the time comes.

We may never find a pirate chest filled with gold doubloons, but if we have worked in both Spain and the United States, we may uncover a treasure that is just as valuable. Thanks to the Totalization Agreement, our “hidden treasure” is not buried under the sand: it has been built over years of hard work and, with the right map, is completely within our reach.

Julius Baer Breaks Records: Private Bank Accelerates with More Active Clients and Wealth at Record Highs

| By Amaya Uriarte | 0 Comentarios

Swiss private banking group Julius Baer confirmed that the global wealth management business maintains strong momentum, reporting record half-year results driven by three factors currently dominating the industry: recovering financial markets, heightened client investment activity, and stricter cost control.

The institution posted an IFRS net profit of CHF 673 million (around $828.37 million), the largest in its history for a first half, representing a 128% increase compared to the CHF 295 million earned in the same period of 2025. Earnings per share nearly doubled, rising from CHF 1.44 to CHF 3.27.

The Real Engine: Growing Assets Under Management and Active Clients

Beyond earnings growth, the metric that best reflects business performance is the trajectory of assets under management (AuM). Julius Baer raised its managed assets to an all-time high of CHF 547 billion ($673.26 billion), equivalent to 5% growth year-to-date.

This progress was supported by three key factors: first, the appreciation of financial markets; second, favorable foreign exchange movements; and third, net new money inflows of CHF 5.7 billion ($7.015 billion).

For the wealth management industry, this indicator is particularly relevant because the scale of assets under management dictates a significant portion of recurring fee income.

Against a backdrop where many high-net-worth investors have increased their exposure to equities, private credit, and alternative strategies, specialized private banks are capturing both market appreciation and fresh capital flows.

Clients Returned to Trading

Another standout element of the half-year was the sharp rise in transactional activity. The gross margin expanded to 87 basis points, up from 83 basis points a year earlier, propelled by “exceptionally high” client activity during the first quarter, the wealth manager stated.

This metric reflects that clients not only kept their capital invested, but also executed a higher volume of transactions, thereby boosting revenues from brokerage, advisory, and investment management services.

This behavior coincides with an environment of elevated volatility across global markets, where movements in interest rates, currencies, and equities have encouraged portfolio rebalancing among high-net-worth investors.

Perhaps the most compelling takeaway from the report is that Julius Baer managed to simultaneously boost revenue and improve efficiency. According to its figures, the adjusted cost/income ratio dropped to 62.6%, down from 68.2% a year earlier, reflecting greater operating leverage.

In other words, the bank generated higher revenues without its costs rising at the same pace—a trend pursued by virtually every major international wealth manager today. In an environment where competitive pressures keep management fees constrained, productivity gains have become one of the primary drivers of sector profitability.

A Solid Balance Sheet to Fuel Further Growth

The Swiss bank’s results add to a trend seen during this earnings season among leading wealth management institutions. In recent months, several global entities have displayed a combination of higher assets under management, recovering fee income, and expanding operating efficiency—fueled by market rebounds and the return of activity among high-net-worth investors.

In this context, Julius Baer’s record performance reinforces the view that the wealth management business continues to benefit from a favorable backdrop for financial wealth creation, alongside a greater willingness among clients to mobilize their portfolios—two factors currently translating into top-line growth for private banking specialists.

Commodities: The Market Story Implied by the “El Niño” Phenomenon

| By Amaya Uriarte | 0 Comentarios

After Spain, the new name capturing attention in the markets is El Niño. According to experts, this weather phenomenon—currently in a phase of active strengthening and intensification in the equatorial Pacific Ocean—could complicate the path of inflation, supply chains, and expectations in commodity markets, particularly agricultural ones.

For experts at Lombard Odier, climate volatility is becoming a global phenomenon. “Recurrent phenomena such as the El Niño cycle are displaying unusual intensity and timing, amplifying the frequency and severity of extreme weather events across multiple regions, with potential macroeconomic repercussions,” they argue in their latest report.

It is certainly a risk that, behind the geopolitical headlines, is beginning to gain traction. “The El Niño phenomenon currently constitutes the central scenario through early 2027. While its direct impact on developed economies remains limited, its effects on food supply, hydroelectric generation, and more agriculture-dependent economies represent a genuine supply-side risk that could keep headline inflation elevated for longer and complicate the disinflation process on which equity markets currently rely,” maintains Terry Ewing, Head of Equities at MIFL.

To understand the impact this phenomenon has on commodities, the data speaks for itself: in 2023–2024, cocoa surged 250%, sugar reached its highest price in over a decade, and rice exporters closed their borders. The Oceanic Niño Index, which represents the three-month moving average of sea surface temperatures in the east-central Pacific, points toward what meteorologists describe as a strong or very strong event. “Compounded by disruptions in the Strait of Hormuz—which have slowed the flow of fertilizers from the Middle East precisely when farmers need to secure inputs—this event comes at a time of unusual fragility for global food production,” notes Aneeka Gupta, Director of Macroeconomic Research at WisdomTree.

Commodities and Regions

However, one of the primary considerations experts point out is that not all commodities will be affected equally; rather, it depends on the geographic region in question. As Gupta explains, South and Southeast Asia are the most exposed regions. “Scantier monsoon rains and above-normal temperatures are classic features of El Niño in this region, directly impacting rice, sugar, and coffee crops. Rice production in India and Thailand has dropped sharply during previous severe episodes, and there is a real risk that supply strain could once again trigger export restrictions, further tightening global balances,” she points out.

She adds that the impact in West Africa will center on the cocoa harvest, where production could decline considerably, while in Australia, a sharp drop in wheat acreage is expected, with a potential production decrease of approximately 9 million metric tons in the 2026/27 crop year. “Not all regions face this situation. Argentina is one of the few countries that structurally benefits from El Niño, as above-average rainfall typically favors soybean, corn, and wheat production. Conditions also tend to improve in parts of the southern United States. These are genuine counterweights, but they are unlikely to fully offset what Asia and Africa may lose,” the expert emphasizes.

The Historical Conclusion

Taking a historical perspective, as summarized by Darwei Kung, Co-Head of Commodities at DWS, price spikes in agricultural products tend to be shorter-lived than those seen in metals or energy. “However, when market supply is tight, even small harvest disruptions can cause rapid price movements. Added to this is a long-term structural trend: rising demand for biofuels, driven by governments aiming to reduce their dependence on fossil fuels. We expect to continue seeing upward pressure on food prices over the coming months and years,” Kung explains.

According to his analysis, these effects usually emerge with a lag and vary by crop and region, but they can carry significant consequences for monetary policy. “Food prices significantly influence inflation expectations beyond their actual weight within the consumer basket,” he concludes.

Ultimately, Kung contends that El Niño is not merely a weather story, nor is it exclusively a food story: “For investors, it is also a story of volatility. High fertilizer costs, energy market uncertainty, and fragile food supply chains make agricultural markets more vulnerable today.”