Avantax Planning Partners' Q1 2023 Holdings: A Shift towards Fixed Income Amidst Volatile Markets

Avantax Planning Partners, Inc. is a registered investment advisory firm that serves as a wealth management partner for financial advisors across the country. As part of their fiduciary duty, they must file Form 13F with the Securities and Exchange Commission (SEC) every quarter, which lists their investment holdings as of the end of the reporting period. In Q4 2022, the firm held shares in 52 different ETFs and individual companies, with a total value of $1.1 billion. In Q1 2023, the firm made significant changes to their holdings, reducing their overall exposure to equities and increasing their holdings in fixed-income securities.

The biggest change in Avantax Planning Partners' holdings between Q4 2022 and Q1 2023 was their reduction in exposure to equity ETFs. In particular, the firm sold off a significant number of shares in Schwab Strategic Trust ETFs, including SCHV (20.4% reduction), SCHG (0.5% reduction), SCHD (1.7% reduction), and SCHZ (83.1% reduction). This reduced their total exposure to equity ETFs from $1 billion in Q4 to $688 million in Q1, a decrease of 31.2%.

The firm also reduced their exposure to individual equities in Q1 2023, selling off shares in companies such as Procter & Gamble (-26.4% reduction), Merck & Co. (-17% reduction), and Heartland Financial (-17.7% reduction). Conversely, they increased their exposure to fixed income ETFs, with significant purchases of SPDR Bloomberg Barclays Short-Term Corporate Bond ETF (FLRN) and iShares National Muni Bond ETF (MUB). They also added to their holdings in SPDR Portfolio Aggregate Bond ETF (SPAB).

Overall, the firm's shift towards fixed income in Q1 2023 reflects a broader trend among investors as interest rates have risen and equity markets have become more volatile. Fixed income investments offer lower returns, but also lower risk and greater stability, which makes them a popular choice for investors seeking to reduce risk in their portfolios.

One potential risk for Avantax Planning Partners is the possibility of rising interest rates, which could negatively impact the value of fixed income assets. However, the firm aims to mitigate this risk by investing in short-term bond ETFs such as FLRN, which are less sensitive to changes in interest rates.

Another potential risk for the firm is the possibility of a market downturn, which could negatively impact the value of equity and fixed income assets alike. However, the firm believes that their diversified portfolio of assets, as well as their active management strategy, will allow them to weather any potential market downturns.

In conclusion, Avantax Planning Partners' Q1 2023 holdings represent a shift towards fixed income and away from equities, reflecting a broader trend among investors seeking stability and reduced risk in their portfolios. While there are potential risks to this strategy, the firm believes that they are well-positioned to weather any potential market turbulence, thanks to their diversified assets and active management approach.