Episode summary
Geopolitical Risk, Inflation and Alts: What Advisors Should Watch Now
Summary
Geopolitical risk is increasingly showing up through inflation rather than a direct market selloff, according to Dana D’Auria. She said investors have largely looked through wars, Middle East tensions and deglobalization, but the effects are starting to appear in CPI around 4%, PPI around 6% and 10-year yields near 4.6%, which can complicate bond exposure even as earnings remain strong.
Dana D’Auria also argued that advisors are struggling with how much tracking error they are willing to take versus the market index. She said index concentration has been rewarded recently, so diversification can mean accepting the risk of lagging a benchmark that clients can clearly see and compare against.
On alternatives, Dana D’Auria said demand for interval funds reflects a shift in the public-private mix and more investor interest in accessing private credit and private innovation. She described Investnet’s UMA integration as a way to automate interval-fund trading windows, streamline accreditation and documentation, and make personalized portfolios easier to implement at scale. The final point was that technology can handle the mechanics, but calming anxious clients still depends on the advisor relationship.
Key takeaways
- Dana D’Auria said geopolitical risk is increasingly working its way into inflation, with CPI around 4%, PPI around 6% and 10-year yields near 4.6%.
- Dana D’Auria said advisors must balance diversification against tracking-error risk, because broad market concentration has recently been rewarded.
- Dana D’Auria said interval fund demand is rising as advisors seek access to private credit and private equity-style innovation.
- Dana D’Auria said integrating interval funds into UMA platforms lets advisors automate trading windows and reduce manual work.
- Dana D’Auria said the advisor, not technology, is what calms clients and keeps them disciplined in volatile markets.
Notable quotes
“the market has sort of ignored it. So, the question I think you're asking, do we keep ignoring it”
“Inflation is probably at 4% now, CPI. Um, CPI or PPI is 6%. So, uh, that's creating a problem with bond yields”
“There's a lot of, you know, sort of the first principles theoretical thinking or research would suggest, "I don't want to be super different from the market because the market is very efficient”
“the name of the game is scale in the personalization”
“the quelling of the fears, that is the advisor, right? That is the advisor and only the advisor”
How the episode opens
Markets are moving faster and clients need more flexibility in their portfolios. To break it all down for me, I'm joined by Dana D'Oria to learn more. Dana, thanks so much for joining me. — Thank you for having me. — So, let's get into the toughest question you'll probably get this whole conversation, geopolitical risk, because tariffs and deglobalization have really reshaped the investment landscape quickly. How should advisors be considering and looking at geopolitical risk right now in their client portfolios?
Well, it's interesting as a question, you know, kind of across the board in terms of investors, because for the most part this market has sort of looked through the geopolitical risk. I mean, we have three wars going on right now, right? And the conflict in the Middle East, in particular, of course, blocking the Strait of Hormuz.
Everyday on any kind of news media you're watching, there's somebody who's talking about we're going to have lagged effects from this. It's not just energy and oil, you know, we're we're going to see in inventories, etc. And so, it's kind of interesting, right, that the market has sort of ignored it.
So, the question I think you're asking, do we keep ignoring it? Will the AI trade? Will the earnings?
I mean, earnings have been fantastic. This has been a great earning season. And so, will that buoy the economy enough that you can keep sort of investing in and and largely ignoring the geopolitical risk.
And my answer would be, well, it's it's not that you can not pay attention to it, right? And you're because you're starting to actually see the impacts. The big place we're starting to see the impact is inflation.
Inflation is probably at 4% now, CPI. Um, CPI or PPI is 6%.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- geopolitical risk
- inflation pressures
- market concentration
- private market access
- alternatives and interval funds
Watch the episode
Watch “Geopolitical Risk, Inflation and Alts: What Advisors Should Watch Now” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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