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These 3 Investment Management Stocks Could Keep Gaining in 2021 – Yahoo Finance

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The year commenced on an impressive note for Investment Management Industry (forms part of broader Finance sector), however, equities plummeted following the rapid spread of coronavirus in various countries including the United States, before taking the shape of a full-blown pandemic. The situation led to the intensified sell-off in March.

The crisis scenario warranted radical actions by the Federal Reserve, and the Trump administration and Congress, which enhanced the financial market liquidity and aided the flow of credit to consumers and businesses. These actions supported markets, and resulted in gains year to date.

Though most of the U.S. economic data were dismal, some better-than-expected interpretations in the later part of the year bolstered investor sentiment. Further, optimism surrounding the coronavirus vaccine has also been favorable. Therefore, the S&P 500 Index has recorded 14.62% gains year to date on strong rebound in equity markets.

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Remarkably, stocks in non-U.S. equity markets have also rebounded, following massive declines in the first quarter. With overall industry inflows and solid investment performance, growth in assets under management (AUM) balance for majority of the industry players is anticipated. Thus, asset managers’ top line is likely to improve, supported by higher performance fees and investment advisory fees, which constitute the majority of their revenues.

Despite the prevailing global concerns, the U.S. economy is witnessing steady improvement. This, combined with growing demand for personalized investment products, is anticipated to open up growth opportunities for the asset management industry.

While asset managers have been facing a number of challenges including stringent regulatory scrutiny, near-zero interest rates and escalating costs; demand for new investment products at lower costs have been supporting the bottom line. Further, with heightened use of technology, asset managers have been able to enhance efficiency and operate profitably. Moreover, the rise in industry consolidation since the beginning of the year amid the pandemic is likely to offer support to investment managers’ profits.

Moreover, though retail investors continue to park funds with investment managers, institutional investors have been shying away. Another factor leading to inflows is that Americans have started saving more (and spending less) as the economy remains uncertain on the prevailing pandemic-related crisis. Hence, the investment management industry is getting more funds from retail investors.

Weakness of the U.S. dollar is also driving the global diversified assets mix. Though active managers are striving hard over passive managers, they have recorded growth in asset classes including international small-cap equity and core fixed income. Notably, fixed income generated positive returns as investors ran for safe-haven assets due to the prevailing global growth concerns and the pandemic induced uncertainty.

Though the impact of the COVID-19 pandemic on the investment management industry is visible, a second wave of the pandemic in certain countries might result in heightened market volatility once again. Nonetheless, at present, the sector seems to be better equipped to deal with systemic jolts. Overall, investment management companies are likely to come up with a value proposition, under which both performance and fees meet clients’ increasing demands.

Here is how to play the industry:

Stocks Worth Buying Now

While the concerns should not be overlooked, one can consider buying stocks as the industry provides an entry point with stocks being undervalued, currently. With the help of the Zacks Stock Screener, we have zeroed in on three investment management stocks carrying a Zacks Rank #1 (Strong Buy) or 2 (Buy) with the market capitalization greater than $1 billion. Moreover, these stocks have recorded year-to-date gains of more than 20% and pay dividends that yield more than 1.50%.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Here are the three stocks that met the criteria:

Boston, MA-based Eaton Vance Corporation EV is engaged in the creation, marketing, and management of investment funds in the United States.

Zacks Rank: #2
Market Capitalization: $7.73B
YTD Gains: 45%
Dividend Yield: 2.22%

Overland Park, KS-based Waddell & Reed Financial, Inc. WDR is a provider of investment management and advisory, investment product underwriting and distribution, and shareholder services administration to mutual funds, and institutional and separately managed accounts in the United States.

Zacks Rank: #2
Market Capitalization: $1.57B
YTD Gains: 50.4%
Dividend Yield: 3.98%

New York-based BlackRock, Inc. BLK is a publicly owned investment manager primarily providing services to institutional, intermediary, and individual investors including corporate, public, union, and industry pension plans, insurance companies, third-party mutual funds, endowments, public institutions, governments, foundations, charities, sovereign wealth funds, corporations, official institutions, and banks.

Zacks Rank: #2
Market Capitalization: $107.85B
YTD Gains: 40.6%
Dividend Yield: 2.05%

Zacks Top 10 Stocks for 2021

In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?

These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Start Your Access to the New Zacks Top 10 Stocks >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Waddell & Reed Financial, Inc. (WDR) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.

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Amazon completes $4B Anthropic investment to advance generative AI – About Amazon

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Amazon concludes $4 billion investment in Anthropic.

Customers of all sizes and industries are using Claude on Amazon Bedrock to reimagine user experiences, reinvent their businesses, and accelerate their generative AI journeys.

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The work Amazon and Anthropic are doing together to bring the most advanced generative artificial intelligence (generative AI) technologies to customers worldwide is only beginning. As part of a strategic collaborative agreement, we and Anthropic announced that Anthropic is using Amazon Web Services (AWS) as its primary cloud provider for mission critical workloads, including safety research and future foundation model development. Anthropic will use AWS Trainium and Inferentia chips to build, train, and deploy its future models and has made a long-term commitment to provide AWS customers around the world with access to future generations of its foundation models on Amazon Bedrock, AWS’s fully managed service that provides secure, easy access to the industry’s widest choice of high-performing, fully managed foundation models (FMs), along with the most compelling set of features (including best-in-class retrieval augmented generation, guardrails, model evaluation, and AI-powered agents) that help customers build highly-capable, cost-effective, low latency generative AI applications.

Earlier this month, we announced access to the most powerful Anthropic AI models on Amazon Bedrock. The Claude 3 family of models demonstrate advanced intelligence, near-human levels of responsiveness, improved steerability and accuracy, and new vision capabilities. Industry benchmarks show that Claude 3 Opus, the most intelligent of the model family, has set a new standard, outperforming other models available today—including OpenAI’s GPT-4—in the areas of reasoning, math, and coding.

“We have a notable history with Anthropic, together helping organizations of all sizes around the world to deploy advanced generative artificial intelligence applications across their organizations,” said Dr. Swami Sivasubramanian, vice president of Data and AI at AWS. “Anthropic’s visionary work with generative AI, most recently the introduction of its state-of-the art Claude 3 family of models, combined with Amazon’s best-in-class infrastructure like AWS Tranium and managed services like Amazon Bedrock further unlocks exciting opportunities for customers to quickly, securely, and responsibly innovate with generative AI. Generative AI is poised to be the most transformational technology of our time, and we believe our strategic collaboration with Anthropic will further improve our customers’ experiences, and look forward to what’s next.”

Global organizations of all sizes, across virtually every industry, are already using Amazon Bedrock to build their generative AI applications with Anthropic’s Claude AI. They include ADP, Amdocs, Bridgewater Associates, Broadridge, CelcomDigi, Clariant, Cloudera, Dana-Farber Cancer Institute, Degas Ltd., Delta Air Lines, Druva, Enverus, Genesys, Genomics England, GoDaddy, Happy Fox, Intuit, KT, LivTech, Lonely Planet, LexisNexis Legal & Professional, M1 Finance, Netsmart, Nexxiot, Parsyl, Perplexity AI, Pfizer, the PGA TOUR, Proto Hologram, Ricoh USA, Rocket Companies, and Siemens.

To further help speed the adoption of advanced generative AI technologies, AWS, Anthropic, and Accenture recently announced that they are coming together to help organizations—especially those in highly-regulated industries including healthcare, public sector, banking, and insurance—responsibly adopt and scale generative AI solutions. Through this collaboration, organizations will gain access to best-in-class models from Anthropic, a broad set of capabilities only available on Amazon Bedrock, and industry expertise from Accenture, Anthropic, and AWS to help them build and scale generative AI applications that are customized for their specific use cases.

Deepening our commitment to advancing generative AI, today we have an update on the announcement we made to invest up to $4 billion in Anthropic for a minority ownership position in the company. Last September, we made an initial investment of $1.25 billion. Today, we made our additional $2.75 billion investment, bringing our total investment in Anthropic to $4 billion. To learn more about the broader strategic collaboration between Amazon and Anthropic, of which this investment is one part, check out the stories below:

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Amazon doubles down on Anthropic, completing its planned $4B investment – TechCrunch

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Amazon invested a further $2.75 billion in growing AI power Anthropic on Wednesday, following through on the option it left open last September. The $1.25 billion it invested at the time must be producing results, or perhaps they’ve realized that there are no other horses available to back.

The September deal put $1.25 billion into the company in exchange for a minority stake, and certain tit-for-tat agreements like Anthropic continuing to use AWS for its extensive computation needs.

Amazon reportedly had until the end of the first quarter to decide whether to increase its investment to a maximum of $4 billion, and here we are just before the deadline, and the company has decided to throw in the maximum amount.

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Anthropic’s AI models are one of very few that compete at the highest levels of capability (however you define it) yet are available at scale for enterprises to deploy internally or in user-facing applications. OpenAI’s GPT series and Google’s Gemini are the others up there, but upstarts like Mistral may soon threaten that fragile triumvirate.

Lacking the capability to develop adequate models on their own for whatever reason, companies like Amazon and Microsoft have had to act vicariously through others, primarily OpenAI and Anthropic. The two have reaped immense benefits by allying with one or the other of these moneyed rivals, and as yet have not seen many downsides.

What we can take from Amazon’s decision to invest the maximum after (one must assume) getting a pretty close look at how they make the AI sausage over there is, really, pretty scant.

It makes too much strategic sense for these companies, which possess enormous war chests saved up for exactly this purpose (outspending rivals when they can’t out-innovate them), to pour cash into the AI sector. Right now the AI world is a bit like a roulette table, with OpenAI and Anthropic representing black and red. No one really knows where the ball will land, least of all the companies that couldn’t predict or create this technology themselves. But if your bitter enemy puts their chips down on red, it only makes sense for you to bet on black.

Especially if you can bet on black at a discount — which is what Amazon got here, since it could invest at Anthropic’s September valuation, which is most certainly lower than it is today.

That said, if things were looking sketchy over there — the way they must have looked at Inflection before Microsoft pounced on it — Amazon could have backed out or just invested less than the full supplemental $2.75 billion. But that might have sent a confusing signal no one wants getting out there, least of all existing multibillion-dollar investors.

We know Anthropic has a plan, and this year we’ll find out what Amazon, Apple, Microsoft and other multinational interests think they can do to monetize this supposedly revolutionary technology.

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Canada to tighten foreign investment rules for AI, other sectors

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Canada will require foreign companies to warn the government in advance before making investments or acquisitions in artificial intelligence, quantum computing and space technology, Bloomberg News reported on Tuesday, citing an interview with Innovation Minister Francois-Philippe Champagne.

The move will aid the government in conducting a national-security review before transactions get too far advanced and would-be investors may be restricted in their access to target companies’ user data or other property while the inquiry is taking place, the report said.


Click to play video: 'Canadians concerned about risk of AI generated fraud'
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Canadians concerned about risk of AI generated fraud

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The tougher rules will also apply to investments in critical minerals and potentially other sectors, Champagne said to Bloomberg.

Earlier this month, Champagne said Canada will crack down on foreign investment in the interactive digital media sector to stop state-sponsored actors from endangering national security.

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