Goldman’s Marcus Invest robo-advisory platform comes to life; Luma expands Latam coverage; and more.

Goldman Sachs has rolled out its robo-advisory platform Marcus Invest in the US to facilitate access to automated portfolios as part of the expansion of its Marcus retail consumer offering. Investors will be able to open a Marcus Invest account for a minimum US$1,000.

The digital platform which will be integrated into Goldman’s existing Marcus app and website, offers a suite of exchange-traded funds (ETFs) based on the investors risk appetite and timeline. The platform will ‘recommend a conservative, moderate, or growth portfolio (or somewhere in between)’ and customise the investor’s approach ‘by selecting one of our Goldman Sachs investment strategies’ to determine which ETFs the investor will be invested in.

The three strategies offered include Core, which concentrates on a mix of US and foregin stocks and bonds; Impact, for ESG investors; and Smart Beta, a selection that targets higher risk assets. Goldman will charge Marcus Invest clients an advisory fee of 0.35% which will cover asset allocations and trade commissions.

The launch is part of the bank’s expansion of its Marcus personal finance brand which was introduced in 2016 with a range of consumer banking services including high-yield savings accounts which can be accessed through the Goldman’s app or web portal.

A Goldman Sachs spokesperson told SRP the robo-advisory platform will be launched in the UK later this year.

Marcus Invest does not allow users to buy and sell individual stocks in contrast to other digital investing apps like Robinhood and Webull Financial. It is meant to compete with digital investing robo-advisors like Betterment and Wealthfront.

Luma Financial Technologies adds US/Latam adviser

Multi-issuer structured products and annuities platform Luma Financial Technologies has announced that Credicorp Capital, a financial firm located throughout Latin America with a presence in Peru, Chile, Colombia, and the United States will use the Luma platform to strengthen their structured product offerings through its asset management business.

‘Asset managers are continuously seeking to differentiate themselves through the value they offer to clients, which has proven to be a persistent growth catalyst for our platform across Latin America,’ said Fernando Concha Bambach, key account manager for Latin America at Luma Financial Technologies

Backed by Bank of America (BofA), Morgan Stanley and UBS (which became a stakeholder in April 2020) - three of the largest structured products manufacturers - Luma provides tools and educational resources for broker-dealers, RIAs and banks to help wealth and asset managers compare, select, customise, price, and track structured products and annuities for their clients.

‘The Luma platform is an attractive choice to manage our structured products (…) [and] provide our clients with solutions and recommendations that match their investment objectives,’ said Rafael Castellanos Lopez-Torres, executive director of Credicorp Capital Asset Management.

Headquartered in Cincinnati, Ohio, Luma entered the Latin American market with the signing of StoneX in September 2020. The platform continues its global expansion with the recent appointment of former Société Générale global head of electronic business equity, derivatives and cross asset, David Wood, and the opening of an office in Zurich, Switzerland. In a recent interview, Luma’s CEO Tim Bonacci told SRP that the platform is seeking to replicate its success in Europe as it targets the annuity space in its home market after transacting over US$25 billion volume in 2020.

European institutional investors and wealth managers favour ETPs to invest in Bitcoin

New research from ETC Group the company behind the BTCetc - Bitcoin Exchange Traded Crypto, a physically backed Bitcoin ETP listed on the Deutsche Boerse XETRA and SIX stock exchanges, and passported for sale across Europe, has revealed that exchange-traded products (ETPs) are the most popular way for European institutional investors and wealth managers to gain exposure to bitcoin.

Its research from 66 institutional investors and wealth managers across Germany, the UK, Italy, the Netherlands, Belgium and the Nordics, who collectively have an estimated US$63.5 billion in assets under management and exposure to bitcoin, shows that 53% use ETPs to gain exposure to the cryptocurrency. This is followed by 23% who said they use structured products, 21% who use direct investment channels and 17% who use hedge funds.

ETC Group’s research also unveiled that nearly nine out of ten (87%) of professional investors interviewed said they plan to increase their exposure to bitcoin this year. Eighty percent said they expect the price of bitcoin, which is currently US$48,000 per coin, to be over US$50,000 by the end 2021.

The firm’s BTCE tracks the price of bitcoin and is 100% physically backed. It is distributed and marketed by HANetf has over US$700m AUM after launching in June 2020.

Institutional investors and wealth managers expect increased use of blockchain in AM

New research has found that over 50% of institutional investors and wealth managers believe there will be a ‘dramatic’ increase in the use of blockchain technology within the asset management sector over the next three years, and a further 44% think there will be a slight increase.

The study is from Global Palladium Fund (GPF), which recently listed four metal exchange-traded commodities (ETCs) and is the first ETC provider to use Blockchain technology to record bar information into distributed ledger technology to provide an extra layer of security and proof of ownership to the issuer. The use of Blockchain is in addition to the traditional recording processes used by the custodian.

When asked what they think is the main reason why blockchain will become increasingly important for asset managers,

Fifty one percent of professional investors interviewed said the shift towards blockchain is part of the growing trend to provide more transparency around investments. Another 35% believe it is due to investors increasingly wanting more information on the investment vehicles they invest in, followed by 12% who said to meet growing regulatory demands. Some two percent believe the main reason for the growing use by asset managers is to reduce costs.

The study also shows that 90% of professional investors believe that over the next five years, investment management firms will come under growing pressure from clients to use blockchain technology to provide greater security and transparency around their work.

Global Palladium Fund commissioned the market research company Pureprofile to interview 100 professional investors – 50 institutional investors and 50 wealth managers – across the UK and Germany.  The survey was conducted online in January 2021.

Diginex partners with Itiviti to launch ‘Access’ 

Digital assets financial services company Diginex Limited has partnered with Itiviti, a technology and service provider to financial institutions, to launch Access, a front-to-back trading, portfolio, and risk management solution that enables the trading of cryptocurrencies and crypto derivatives across several platforms.  

Access is powered by Itiviti’s trade automation technology and infrastructure Tbricks. The launch of Access comes as institutional investors ‘are making a wholesale shift into digital assets, driven by dwindling returns in traditional assets and escalating fiscal stimuli fuelling rising concerns about inflation,’ according to Diginex.   

Access offers an aggregated order book across exchanges, and the ability to ensure best execution across liquidity pools. Execution, order and portfolio management are streamlined for investors through a front, middle, back office with real time risk and P&L. The new platform enables institutional investors to trade crypto currencies and manage their risk and portfolio in the same way as any other traditional asset classes.  

Tbricks is a next-generation, cross-asset trading system optimised for low latency, high throughput and scalability, and is already in use by several tier one sell-side firms and banks.

As the financial industry’s transitions into the digital era a number of equity derivatives executives have joined digital firms seeking to bolster their capabilities around structured products as they have become an appealing vehicle to design and deliver crypto investment products. 

In early 2020 Diginex hired Shane Edwards, former managing director and global head of equity derivatives at UBS Investment Bank, who joined digital asset financial services and advisory company as head of investment products.