Wall Street firms like BlackRock and Goldman Sachs are pushing alternative assets into the portfolios of individual investors. These assets, such as private equity and real estate, traditionally reserved for the ultra-wealthy, offer the potential for higher returns but also come with risks like illiquidity. BlackRock and Goldman aim to democratize Wall Street by giving more investors access to these assets through products like target date funds. Goldman recently announced a private credit product for retirement plans, structured as a collective investment trust (CIT). This move into alternatives is expected to generate fees for both companies, providing a stable revenue stream compared to traditional investment banking services. The push into alternative assets by major financial firms like BlackRock and Goldman Sachs opens up a significant growth opportunity in asset and wealth management, offering potential for higher fees and diversifying revenue sources. BlackRock is shifting focus to alternative assets, with private credit ETFs and model portfolios now available. The move aims to simplify access to private assets for advisors and clients, removing barriers to entry. However, education on the risks of alternative investments is crucial to avoid past mistakes like Blackstone’s real estate fund debacle. Despite challenges, the trend of offering private assets to individual investors is expected to grow significantly in the coming years. Jim Cramer’s Charitable Trust holds positions in GS and BLK. Subscribe to CNBC Investing Club for trade alerts.
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2. Apple’s stock hits an all-time high following the release of strong quarterly earnings. The company reported revenue growth in all product categories.
3. Federal Reserve Chairman Jerome Powell signals that interest rates will remain near zero for the foreseeable future due to economic uncertainties stemming from the pandemic.
4. Amazon Prime Day is set to take place on October 13-14, with discounts available to Prime members on a wide range of products. The company expects a boost in sales during the event.: How BlackRock and Goldman Sachs are bringing Wall Street’s hottest asset class to 401(k)s