DWS Group adds Marwin Martinez in Miami as senior Xtrackers sales specialist for the US offshore & non-resident clients market, according to a post shared by Martinez on his LinkedIn profile. According to information obtained by Funds Society, he will be responsible for managing relationships with financial intermediaries serving Latin American clients.
“I’m pleased to share that I’m starting a new position as Vice President, Senior Sales Specialist of Xtrackers – U.S. Offshore & NRC Business at DWS Group,” wrote Martinez, a professional with experience in relationship management and a strong track record in the industry.
He worked for six years at asset manager Vanguard, across two separate periods. His last role at Vanguard was similar to his current position at DWS. Prior to that, he spent 11 years at AllianceBernstein, where he held various positions and ultimately served as Assistant VP – Senior Relationship Manager Latin America Institutional, US & Canada Offshore.
Martinez holds a degree in International Business and Finance from Temple University – Fox School of Business and Management, and also holds FINRA Series 7, 6, and 63 licenses.
The Difference Between the Risk an Investor Is Willing to Take and the Risk They Should Take Is Not Academic—It’s the Difference Between Checking Boxes and Delivering Truly Suitable Solutions
According to Oxford Risk, for many years, advisers and firms have relied on some version of what is often called Attitude to Risk (ATR) as the main— and in many cases, the only—criterion for portfolio selection. However, they believe that ATR was never truly fit for purpose. “It provided an easy number to anchor to, but not a complete picture. It only captures part of what we need to know about an investor, and often not even that particularly well,” the firm argues.
Oxford Risk’s approach begins with a simple premise: the amount of investment risk an investor should take—their Suitable Risk Level (SRL)—must be based on a more complete understanding of who they are and how they relate to their investments. This requires moving beyond a narrow focus on a single attitude and instead considering a combination of key factors:
Risk tolerance, understood as a long-term psychological trait that reflects how much risk an investor is willing to take in relation to their total wealth;
Risk capacity, representing their financial ability to take on risk, considering time horizon, dependency on assets, income stability, and liquidity needs;
Behavioral capacity, referring to their emotional strength to tolerate market volatility, expressed in traits like composure; and finally,
Knowledge and experience, which help assess the investor’s familiarity with the investment world and may temporarily limit their exposure to risk.
Each of these components plays a distinct and complementary role in constructing the investor’s SRL.
The Limits of “Attitude” Toward Risk
The term attitude to risk conceals significant complexity. Each investor has multiple attitudes toward risk: long-term and short-term; rational and emotional; domain-specific and general. What matters is not how a person feels about risk today or in response to recent events, but their stable, long-term willingness to balance risk and return across their total wealth over time.
This is precisely what a well-designed risk tolerance assessment should measure. But market RTA tools often fall short: they confuse risk tolerance with optimism, confidence, or knowledge; they fail to isolate the core trait; and they produce unstable results that may change drastically with the markets.
Moreover, ATR—even when well-measured—is only part of the story. Most tools that use ATR completely ignore risk capacity, and with it, the dynamic life context of the investor’s financial situation. In their view, risk tolerance tells us how much risk people are willing to take; risk capacity, how much they can afford to take. “Ignoring the latter can cost decades of compounded growth and lead to very unsuitable long-term outcomes. Suitable risk isn’t what feels safe today, but what supports financial security over time,” they note.
From Investor to Portfolio
At Oxford Risk, they believe that understanding the investor is only half of the equation. “Assigning them the right portfolio also requires knowing the long-term risk level of that portfolio. This is where another mismatch often arises. Too often, portfolio risk is assessed using short-term historical volatility—a highly unstable and context-dependent measure. This leads to inadequate risk labels and poor long-term alignment,” they state.
In their view, what’s needed is stability on both sides: a stable measure of the investor’s SRL, based on proven traits and models over time; and a stable measure of portfolio risk, based on expectations of long-term outcome uncertainty. “Only if both conditions are met can we ensure that the risk match is accurate at the time of recommendation and remains appropriate as both markets and personal circumstances evolve,” they affirm.
Their key conclusion is that attitude to risk was a useful stepping stone, but it is no longer sufficient (indeed, it never truly was). “A truly suitable level of risk must combine: a precise, psychometric measure of risk tolerance; a forward-looking, situational awareness of risk capacity; a behavioral understanding of composure and its effect on behavior; and an appreciation of knowledge and experience and their role in informed decision-making,” they argue.
In their view, only in this way can we deliver investment solutions that align not only with what an investor says or feels, but with who they are, where they are in life, and the best way to support their long-term goals. “Suitability is not a number. It is a relationship (between investor and investment) based on understanding, adapted over time, and empowered by technology that embeds science into every recommendation,” they conclude.
Pixabay CC0 Public DomainDiaphanum Considers Asset Valuations Demanding
The damage is done, and the crisis unleashed by U.S. sanctions on three Mexican financial institutions is now set to be resolved through several avenues: political, judicial, and, in the case of Intercam, through a sale.
The U.S. Department of the Treasury has granted a new extension to CI Banco and Intercam, as well as to the Mexican brokerage firm Vector, which now have until October 20, 2025, to reach agreements and address the findings—or be disconnected from the U.S. financial system. The previous deadline had been set for September 4.
This marks the second time the Financial Crimes Enforcement Network (FinCEN) has extended the deadline.
“This extension reflects the continued measures undertaken by the Government of Mexico to effectively address the concerns raised in FinCEN’s orders, including maintaining temporary administration of the affected institutions to promote regulatory compliance and prevent illicit financing,” the Treasury Department stated in an informational note released Tuesday evening when announcing the extension for the Mexican financial institutions.
“Death Sentence”: CI Banco
The extension was granted despite reports earlier this week that CI Banco filed a lawsuit against the U.S. Department of the Treasury and FinCEN over the money laundering accusations made against it. CI Banco argued that the institution had been given a “death sentence” by being effectively blocked from the U.S. financial system.
The bank accused the Treasury and FinCEN of damaging its reputation and credibility without presenting solid evidence, which immediately triggered a managerial intervention by Mexican authorities in the institution, as well as in the other two implicated entities.
CI Banco has been seriously affected by the accusation. On Tuesday, it was also reported that Grupo Financiero Multiva signed an agreement to acquire all of CI Banco’s trust business assets, although the financial terms of the deal were not disclosed.
However, data from the National Banking and Securities Commission (CNBV) show that, as of the end of June this year, CI Banco’s trust business amounted to 3.102 trillion pesos (around USD 163.266 billion), representing 26.7% of the entire system.
In contrast, Multiva’s trust business stood at 33.733 billion pesos (USD 1.775 billion), just 0.29% of the more than 11.5 trillion pesos (USD 605.264 billion) handled by the banking sector’s fiduciary operations.
“With this transaction, Banco Multiva, in its capacity as trustee, will ensure the continued normal operation within the applicable regulatory compliance framework, guaranteeing the protection of the rights of the parties involved in the trust businesses,” Multiva stated in a message sent to the Mexican Stock Exchange.
Intercam Fails to Withstand Pressure, Sells to Kapital Bank
Intercam could not withstand the pressure triggered by accusations of alleged money laundering operations by the U.S. Department of the Treasury. The institution—which next year would have marked 26 years in operation as a financial group—announced its sale to Kapital Bank.
Kapital Bank, a Mexican financial institution, will acquire the assets, liabilities, branches, and trusts of Intercam Banco, Intercam Casa de Bolsa, and Intercam Fondos. The total value of the transaction was not disclosed.
The acquisition, subject to approval from the CNBV and other regulatory authorities, represents a strategic move for Kapital Bank and an opportunity to strengthen its operational capacity and value proposition for corporate clients.
Kapital Bank announced it will inject USD 100 million to reinforce Intercam’s operations, provide greater financial stability, and ensure the fulfillment of obligations to clients and investors.
Second Extension
The initial deadline to disconnect the accused Mexican institutions from the U.S. financial system had been set for July 21. However, just days before that date, the first extension was granted through September 4.
Now, a second extension has been issued to allow the institutions involved to comply with the orders issued by the Treasury Department. However, while that process unfolds, the damage continues. On Tuesday night, in addition to news of the sale of CI Banco’s trust business, the potential end of Intercam was revealed, as it sells its assets to a smaller bank.
Merrill Lynch Wealth Management announced the promotion of Fabio Concesi to market executive for the Palo Alto, California market. Until this past July, Concesi served at the investment bank as associate market executive in the Wealth Management Miami & Islands division.
“I’m pleased to announce that Fabio Concesi has been named market executive for the Palo Alto market,” wrote Brian Ludwick, managing director of Merrill Lynch’s Wealth Management division, on his LinkedIn profile, where he invited others on the platform to congratulate Concesi on his new role at the firm.
In a post on his own profile on the same social network, Concesi wrote that he feels “honored and grateful for this incredible opportunity” to lead Merrill’s Palo Alto market and “our talented financial advisors and associates.”
According to his LinkedIn post, they aim to “empower our teams in Palo Alto and San Mateo with all the resources they need to help clients achieve their financial goals and life purposes.”
A graduate of Universidade Candido Mendes in Rio de Janeiro with a postgraduate law degree from the Universitat de Barcelona, Concesi began his professional career in 2004 at PwC Brazil before joining Citi, where he worked for nearly 10 years, based in Barcelona, Zurich, and Miami. In January 2016, he joined Merrill Lynch Miami, covering Wealth Management.
Despite the imminent arrival of the so-called “generational wealth transfer,” which will bring a larger number of high-net-worth individuals (HNWIs) and fewer advisors to serve them, many wealth management firms are simply not prepared for success. According to the report “Capturing HNWI Loyalty Across Generations,” published by Capgemini, to ensure that private bankers can interact effectively with this new generation, firms must evolve rapidly on an organizational level but, above all, technologically.
“Wealth management executives who delay will face significant risk of losing both investors and talent to more agile competitors. The leading wealth management firms are adopting AI-based, industry-focused relationship management tools, as well as omnichannel experiences that eliminate manual processes, provide real-time guidance, and autonomously perform predefined tasks. By supporting their advisors and building loyalty among the next generation of HNWIs, these firms are positioning themselves to ensure long-term engagement and sustained business benefits,” the report’s authors state.
Signs of Impending Disruption in the Sector
With the global increase in the population of high-net-worth individuals (HNWIs), many wealth management firms are optimistic about expanding the population they aim to serve. In this context, the report asserts that “the great wealth transfer is also set to disrupt the wealth management sector by significantly straining, or even breaking, well-established loyalty ties.”
According to its analysis, private bankers now face the convergence of three significant trends related to HNWI loyalty. The first is a shift in investment preferences among the next generation of HNWIs. “Comprising Generation X, millennials, and Generation Z, this group expects hyper-personalized engagement. In fact, 81% of next-generation HNWIs plan to quickly leave their parents’ wealth management firm, driven by factors such as the lack of preferred digital channels (46%), lack of alternative investments (33%), and insufficient value-added services (25%),” it states.
Secondly, there will be an increase in the volume and diversity of HNWIs. The report indicates that as family wealth passes down through multiple successive generations, the number of clients to serve grows exponentially. Moreover, more than half (56%) of total wealth is expected to be transferred to women, who may have investment goals, styles, and priorities significantly different from those of men.
And thirdly, firms will face a changing landscape due to the imminent wave of retirements, which will leave an increasingly smaller number of experienced bankers. “Who will take their place? A stream of young, digital-native professionals who expect the workplace to evolve both technologically and culturally. In fact, they are already expressing such significant discontent that approximately one-fourth plan to switch wealth management firms or start their own in the near future,” the document states.
In other words, in the very short term, there will be more high-net-worth clients to serve, with a broader range of expectations for hyper-personalized services, while the supply of senior bankers will drastically decline.
The Value of Private Bankers
As for the importance of the banker in the loyalty-building process, our research also revealed that two-thirds of next-generation HNWIs consider the strength of a firm’s private banker team a key factor when choosing a wealth management provider. Sixty-two percent of next-generation HNWIs state they would follow their relationship manager if they moved to another firm, meaning loyalty is no longer based on the institutional ties felt by previous generations.
However, 56% state that their firms lack the necessary tools to meet the needs of next-generation HNWIs—namely: proactive information, personalized recommendations, and seamless communication across different channels. In light of the report’s findings, it is clear that to build loyalty among next-generation HNWIs, wealth management firms must strengthen their relationship management stance. This includes modernizing live and self-service technologies required to meet client expectations.
The Right Technology at the Right Time
The report notes that, as in many current situations, leveraging automation strategically is not about adopting technology for its own sake. According to its assessment, the key lies in understanding what next-generation HNWI clients expect from their wealth management firm and what tools private bankers need to earn their loyalty.
For example, despite the ubiquity of mobile apps, a surprising finding in the report was the greater interest of next-generation HNWIs in video calls and website interactions over mobile apps. In some types of interactions—such as making inquiries or addressing a concern—even traditional phone calls prevailed over apps.
“Less surprising was the decline in interest in face-to-face meetings, which generally received the lowest rating across all interaction types. The only exception was seeking expert advice, where face-to-face meetings ranked second to last—although only by a small margin,” the report concludes.
Developing an Approach That Fosters Loyalty
To address the imminent shortage of private bankers and ensure that advisors have the tools they need, start by developing a strategic approach to guide the technological transformation for next-generation HNWIs. According to the report, critical aspects include:
Assessing Digital Capabilities.
Since next-generation HNWIs expect seamless, convenient digital channels that allow them real-time access to personalized and relevant information, it is necessary to determine whether the service offering requires any updates. Similarly, the report advises that the platform should enable advisors to deliver hyper-personalized and omnichannel experiences quickly and efficiently.
Adopting Artificial Intelligence.
Ensure that bankers have access to the latest AI tools, including generative AI (GenAI) and agentic AI technologies. “Advanced solutions integrate multiple internal and external sources to eliminate manual tasks, provide actionable insights, and generate real-time recommendations on next steps—allowing advisors to focus their expertise on strengthening client relationships,” the document states.
Incorporating Behavioral Dynamics Technologies.
“It’s no secret that emotions and biases can lead to irrational financial decisions that deeply affect client portfolios and the profitability of wealth management. By adopting modern AI-based behavioral dynamics tools, wealth management firms can empower bankers to quickly identify and navigate clients’ behavioral investment patterns. These types of solutions can also dramatically enhance and hyper-personalize the firm’s communications to help influence how clients invest,” it adds.
Ensuring Readiness for AI Technology.
To get the most out of AI-based solutions, the document notes that it is essential “to be comfortable, confident, and skilled in using the tools.” In its view, only by providing private bankers with sufficient training and peer mentoring will investments in artificial intelligence achieve the desired outcomes.
“Monitor and refine the implementation of technology based on feedback from the firm’s private bankers and next-generation HNWIs. Continuously evaluating your digital tools ensures that your firm can make quick and timely adjustments,” the report concludes.
Just Weeks Ago, Through the Truth Social Platform, U.S. President Donald Trump Announced the Appointment of Stephen Miran as a New Member of the Federal Reserve Board of Governors (Fed) Following the Resignation of Adriana Kugler
Miran will temporarily assume this position only until January 31, 2026. This appointment covers the period while a successor is selected for Jerome Powell, whose term as Fed Chair ends in May 2026.
So, who is Stephen Miran? Until now, Miran held the position of Director of the Council of Economic Advisers (CEA), to which he was appointed by Trump in December 2024. According to analysts, he is considered the architect of Trump’s reciprocal tariff policy and the promoter of a plan called the “Mar‑a‑Lago Accord,” aimed at countering the overvaluation of the dollar and restructuring the global trade system. Additionally, he has been one of the most vocal critics of the Fed’s independence and has made numerous proposals, such as shortening the terms of Fed governors or changing the way they are appointed.
Key Ideas: Dollar and Bonds
Regarding Miran, Gilles Moëc, Chief Economist at AXA, notes that his essay on how to distort the global monetary system to better serve U.S. economic interests is highly insightful for understanding his views. “In it, he outlines several ways to provoke a depreciation of the dollar without causing a drop in demand for U.S. assets, which would otherwise lead to rising interest rates in the U.S. and, eventually, an economic slowdown, further complicating the already complex budget equation,” he states.
In this context, Moëc summarizes that Miran’s idea is that, under a “Mar‑a‑Lago Accord”—inspired by the Louvre and Plaza Agreements of the 1980s, when Europe and Japan coordinated efforts to devalue the dollar—foreign central banks would agree to shift their reserves into very long-term or even perpetual U.S. Treasury bonds. This would limit long-term interest rates, while private investors would exit the U.S. market in anticipation of the dollar’s depreciation.
“Miran himself emphasizes how unlikely it would be for Europeans to accept such a measure and therefore introduces a coercive dimension: long-term investment in U.S. debt would be the ‘compensation’ Europeans pay to avoid tariffs and benefit from Washington’s continued military protection. However, and this is a point Miran raises without resolving, a significant problem is that European investments in the U.S. are mainly the result of countless decentralized decisions made by private actors: real-economy companies for direct investment, and asset managers and institutional investors for portfolio flows.”
According to Moëc, Miran’s essay proposes another “worrisome” idea: the possibility of taxing the interest paid on Treasury securities to non-resident investors. In his view, this would likely drive them away from the U.S. bond market, but given the difference between the amount of central bank reserves and the U.S. assets held by private investors, “the net effect on the overall cost of U.S. financing could be dramatic for the health of the U.S. economy.”
“In short, the current U.S. approach to its trade and financial relations with Europe aims to improve a situation already highly favorable to the United States. There is a limit to how far American interests can be pursued through coercion. Europeans may come to see the macroeconomic cost of maintaining a close political and defense relationship with the U.S. at all costs as too high, making other geopolitical options more acceptable,” he concludes.
The Fed and the FOMC
The second assessment from experts is that Miran’s arrival at the FOMC will generate some conflict due to his view that the dollar is overvalued and that the U.S. trade balance cannot be rebalanced as a result. “He believes that, to secure the financing of U.S. public finances, other countries could be made to purchase very long-term Treasury bonds. This likely came up during tariff negotiations. I’m thinking, for example, of the $600 billion from the European Union and $550 billion from Japan, which Trump wants to use at his discretion,” says Philippe Waechter, Chief Economist at Ostrum AM (a Natixis IM affiliate).
According to his analysis, for the Fed, a fall in the dollar would trigger an inflation shock that would add to the impact of tariffs and, in such a case, the Fed would need to raise its policy rate. Moreover, if a “Mar‑a‑Lago Accord” were perceived by investors as credible, it could trigger significant capital outflows from U.S. markets; if not, any drop in the dollar would be seen as an opportunity. For Waechter, “the power struggle between Powell and Miran will be crucial for everyone. The risk is that U.S. monetary policy becomes subject to White House directives. That would be a disaster.”
A similar warning comes from Muzinich & Co: “Personnel changes matter less for the short-term path of official interest rates—which markets still expect to trend lower—than for the issue of institutional independence. Trump’s repeated public criticisms of Powell, calling him ‘too slow’ and an ‘idiot,’ among other insults, keep alive the possibility of a leadership transition at the Fed aligned with the administration’s more interventionist economic stance.”
In this context, Enguerrand Artaz, strategist at La Financière de l’Échiquier (LFDE), adds that “the Fed’s independence has come under attack, and the central bank’s communication is going to be complicated over the coming months.” For Artaz, this situation is part of a broader institutional dynamic: “The functioning of U.S. institutions has been weakened during the early months of Trump’s term.” This structural weakening is accompanied by “enormous uncertainty regarding its impact on growth and inflation.”
The outcome of Powell’s succession will mark a dividing line between two conceptions of the Federal Reserve’s role: as a technical guarantor of macroeconomic stability or as a political tool serving the presidential agenda, he concludes.
Daniella Peña Muñoz Has Been Hired by AXA Investment Managers and Will Work at the Firm’s New York Office as Senior Associate US Offshore and LATAM Wholesale Distribution, According to Sources From the Asset Manager Confirmed to Funds Society
“We have hired Daniella Peña Muñoz, coming from Credicorp Capital, for the position of Senior Sales Associate for our sales team based in New York. Her role will be to support clients in the US Offshore and Latin American markets alongside Rafael Tovar, Head of US Offshore & LATAM Wholesale Distribution,” stated AXA.
Peña Muñoz replaces Daniel Menoni, the same sources said.
With studies in finance and law at Universidad Externado de Colombia, Peña Muñoz developed her career at Credicorp Capital for over nine years, serving as Investment Products Senior Associate since 2023.
AXA IM, or AXA Investment Managers, is a global investment management firm and part of the AXA Group. AXA IM is dedicated to asset management for individual and institutional clients, offering a wide range of investment solutions.
In recent years, international trade has been marked by a shift toward protectionism and fragmentation. Geopolitical tensions, coupled with unilateral tariff decisions, have triggered a wave of measures impacting countries, sectors, and supply chains in uneven ways. In this new environment, where trade policy increasingly influences financial flows, markets have responded with volatility and uncertainty, according to FlexFunds.
The imposition of selective tariffs, the redesign of trade agreements, and the growing regionalization of production are reshaping the global economic map. Sectors such as technology, manufacturing, and consumer goods—highly exposed to international flows—have been the most affected, while inflation expectations and monetary policy decisions add further pressure on portfolio returns.
The trade dispute between the United States and China marked a turning point in the international trade system. Protectionist measures imposed by both countries—such as increased tariffs on key products and the enforcement of technological restrictions—set off a chain reaction in other economies that also opted for protectionist approaches in their trade policies. The European Union, India, and even some Latin American nations have tightened foreign trade regulations to protect their domestic industries.
For institutional managers, these changes demand far more than tactical adjustments: they require a deep reassessment of diversification and asset allocation strategies. In this context, asset securitization emerges as a key tool to mitigate risks, preserve value, and capture new opportunities in an increasingly uncertain and fragmented environment.
How Tariff Pressures Are Reshaping the Role of Portfolio Managers
Widespread tariffs and growing trade uncertainty impose new challenges for asset managers:
Faced with this scenario, many managers are rethinking traditional exposures and adopting more flexible and resilient solutions. Among these, one strategic tool is gaining prominence: asset securitization.
Asset Securitization: Tactical Flexibility and Macro Alignment
Asset securitization enables the transformation of illiquid assets—such as real estate cash flows, invoices, corporate revenues, or loan portfolios—into structured, efficient, and tradable vehicles. This practice offers institutional managers significant advantages in the new environment:
1. Structural flexibility and improved liquidity
Converting private assets into listed or transferable instruments—such as structured notes or asset-backed funds—allows for quick adjustments to exposure without sacrificing diversification or efficiency.
2.- Ease of portfolio rebalancing
In an environment of geopolitical fragmentation and frequent regulatory changes, having structured vehicles allows for rapid portfolio adjustments, dynamically adapting to new trade restrictions, regional opportunities, or shifts in sector outlooks.
3. Targeted geographic diversification
Through securitization, managers can gain exposure to assets in regions less affected by tariff policies. For example, economies such as Mexico or India could benefit from supply chain shifts driven by nearshoring.
4. Inflation protection
Structures indexed to real cash flows—such as rents or adjustable fees—help preserve portfolio purchasing power, offering alternatives to traditional bonds currently under pressure from high interest rates.
5. Efficient access to defensive sectors
Securitization facilitates the inclusion in investment strategies of sectors less sensitive to international trade, such as infrastructure, energy, healthcare, or logistics, through structures tailored to institutional appetite.
6. Tax optimization and regulatory compliance
Structuring these vehicles from efficient jurisdictions, such as Ireland, maximizes tax and regulatory benefits, particularly in contexts where domestic rules may tighten.
Redefining Portfolios, Anticipating Scenarios
Portfolio managers who integrate securitization as a strategic tool can:
Reduce exposure to regions under tariff pressure or sanctions
Access assets in areas with more stable or industry-friendly policies
Capitalize on structural trends such as reshoring and nearshoring, which are reshaping global investment flows
And beyond mitigating geopolitical risks, they can:
Align their portfolios with the new global value chains
Position capital in regions and sectors with growth potential
Design investment vehicles that respond to global macrostrategy, beyond mere asset selection
In an environment defined by volatility, trade polarization, and constant rule changes, asset securitization moves from being an operational technique to a strategic positioning tool. For institutional managers, it represents a way to preserve value, gain agility, and build portfolios aligned with the new global economic order.
Moreover, the ability to facilitate dynamic portfolio rebalancing—amid shifts in trade policies, regulatory risks, or macroeconomic adjustments—makes securitization a key mechanism for keeping investment strategies relevant and resilient in real time.
In this context, FlexFunds offers asset securitization solutions—a process that converts different types of financial assets into tradable securities. FlexFunds’ solutions can repackage multiple asset types into an investment vehicle, enabling managers or financial advisors to distribute their strategies more easily and cost-efficiently to a broader client base.
For more information, you may contact our specialists at info@flexfunds.com.
F/m Investments, a boutique investment firm with USD 18 billion in AUM and an ETF provider, announced in a statement the launch of the F/m Compoundr ETF series, a set of tax-advantaged fixed income ETFs developed in collaboration with Compoundr LLC.
These ETFs are the first to implement an investment index specifically designed to address the impact of the tax burden on dividends.
Both funds employ Compoundr’s rules-based dividend rotation strategy, powered by the newly launched Nasdaq Compoundr™ indexes. This approach allows investors to gain exposure to income-generating asset classes while gaining greater control over the timing and nature of the taxable income they recognize.
“With Compoundr, we address one of the market’s most underappreciated frictions: dividends that some investors would rather avoid,” said Alexander Morris, CEO of F/m Investments.
Compoundr’s strategy works by rotating between economically equivalent portfolio investments just before their ex-dividend dates, shifting the return profile toward deferred capital gains instead of current income. This tax-efficient exposure to high yield and aggregate bonds, based on indexes in collaboration with Nasdaq, helps investors more effectively capitalize on their after-tax returns over time.
“The ETF structure often assumes dividends are always desirable, but for many investors—particularly trusts and tax-sensitive accounts—they are not,” said David Cohen, partner at Compoundr LLC.
“Compoundr provides access to the exposures investors want, without the tax inefficiencies they don’t. It’s a transparent, rules-based dividend deferral strategy designed to preserve the investment thesis and eliminate unnecessary taxable income,” he added.
“We offer investors greater control over when and how they receive income, within the inherently efficient structure of an ETF,” added David Littleton, President of F/m Investments. “High yield and investment-grade bonds were ideal starting points, but this strategy has broad applicability across many asset classes in the future,” he concluded.
Both ETFs are listed on Nasdaq.
The F/m Compoundr High Yield Bond ETF (CPHY) is managed by John Han, Marcin Zdunek, and Kevin Conrath, while the F/m Compoundr U.S. Aggregate Bond ETF (CPAG) is managed by Peter Baden, Marcin Zdunek, and Kevin Conrath. Each fund tracks its respective Nasdaq Compoundr™ index and rotates monthly, offering exposure without performance-based tax liability.
Photo courtesyAlexandre Davis, Investment Director at Wellington Management
In a context marked by market volatility, geopolitical uncertainty, and constant regulatory changes, responsible investment remains a fundamental pillar for those seeking sustainable long-term returns. In the view of Alexandre Davis, Investment Director at Wellington Management, SRI continues to be synonymous with long-term vision and structural investment opportunities. We discussed this in our latest interview.
What Has Happened to Sustainable and Responsible Investment? Has It Been Pushed to the Background?
For me, investing responsibly means focusing on long-term value creation, which involves understanding not only a company’s revenues and products but also its supply chains. This goes beyond short-term disruptions and takes into account structural changes, such as the rise of protectionism since the COVID pandemic or earlier political decisions. For example, we invested in a life sciences company that, as early as 2017, decided to move its production out of China in response to rising tensions between China and the United States, which have only intensified since then. This kind of forward-looking risk management is at the heart of our engagement efforts. We spend a great deal of time in dialogue with companies to help ensure they are as well-positioned as possible to achieve long-term success and remain resilient amid a changing global environment.
Given the Current Context, What Elements or Factors Could Act as Catalysts for Investors to Reprioritize Responsible Investment?
Ultimately, investors rightly focus on returns, as they are the main benchmark for evaluating the success of an investment. Although the environment has been more challenging in the short term for those applying responsible investment criteria—due to a highly concentrated market performance—we continue to see long-term opportunities, especially as the market broadens. Companies with a strategic long-term orientation and that aim to maximize resource efficiency should be better positioned than those that do not. Fundamentals, profit generation, and the ability to generate alpha for our clients are key elements in continuing to demonstrate the relevance of responsible investment in today’s context.
How Can Sustainable Equity Portfolios Align With Current Macroeconomic Conditions?
Every day brings new headlines about tariffs, regulation, geopolitics, conflicts, climate change, or artificial intelligence. The pace of change is constant, which requires executive teams and boards of directors to ensure their companies can adapt and evolve to remain competitive. Meanwhile, the characteristics that we believe increase the likelihood of long-term success remain the same: a sustainable competitive advantage (moat), a strong balance sheet, high-quality leadership, an empowered board, a stakeholder-oriented vision, and disciplined capital allocation that preserves and enhances value over time. These are the qualities we seek—and the standard we continue to demand—in all portfolio companies. When strong leadership reinvests wisely and with a long-term vision, it activates what we call the stewardship flywheel: a virtuous cycle of value creation in which leaders allocate capital to sustain and enhance future returns.
We Often Talk About Responsible Investment, but What Does the Stewardship Approach Promoted by the Fund Manager Really Add?
Our approach is based on three fundamental pillars: long-term vision, core portfolio construction, and active dialogue with the companies we invest in. We invest with a horizon of over 10 years, in contrast with the average holding period in the market, which is around 10 months. This horizon allows us to support companies in developing their long-term strategy and creating sustainable value. The portfolio is designed to capture security-specific risk and return, avoiding the common bias toward growth or technology observed in many sustainable strategies. In addition, we maintain active dialogue with the companies we invest in, especially with their boards of directors, which often go unnoticed despite their key role in governance, succession, and long-term strategy. This direct, hands-on involvement reflects our fiduciary responsibility and our commitment to sustainable long-term value creation.
Based on Your Experience, How Has the Concept and Approach to Stewardship Evolved in the Fund Industry?
When we launched this strategy, we saw clear demand for a responsible investment proposition capable of generating long-term returns without relying on growth factors or showing excessive concentration in technology. We believe that investing with a long-term perspective requires balanced sector and geographic risk management, allowing returns to be driven by security selection. This philosophy—based on rigorous portfolio construction, active management, and responsible corporate oversight (stewardship)—has been very well received by clients. The strategy acts as a stable core allocation, on top of which more tactical exposures by style or sector can be built, providing both resilience and flexibility.
How Can an Active Stewardship Approach Reveal Opportunities? Is It More Useful in Times of Uncertainty?
We believe stewardship cannot be passive. We conduct more than 130 interactions a year with the companies we invest in, making the most of our time with executive teams and boards to focus on their long-term strategy. We invest in businesses with strong balance sheets and consistent cash generation, which allows them to be more resilient to short-term disruptions such as tariff changes, regulatory uncertainty, or shifts in economic policy. These interactions allow us to assess the quality of leadership, decision-making, and strategic direction. In times of volatility, the board’s vision and foresight are key to achieving better outcomes. Through active dialogue, we analyze these strengths while also looking for clear signals of execution and a strong talent base in CEOs and their teams to ensure continuity in times of crisis.
Finally, Could You Mention Three Ways ESG Factors Can Enhance Portfolios for the Second Half of the Year?
We believe our approach is especially well suited to today’s environment. First, it helps reduce volatility by focusing on companies with strong leadership capable of navigating complex and changing political and economic contexts. Second, it is a core strategy that diversifies risk through the selection of high-quality companies across different sectors and regions. Third, our long-term approach avoids the mistakes associated with short-term decisions—such as overreliance on certain supply chains—that can lead to future disruptions. We believe companies that manage these risks proactively are better positioned to deliver sustainable returns. This disciplined, forward-looking strategy allows investors to stay focused and aligned with their long-term goals.
