Feeling guilty about not meeting 2026 goals? Don’t look at Wall Street. The five biggest investment banks have already beaten last year’s record for equity trading revenue by about $7 billion, a CNBC analysis found.

Three of them — Goldman Sachs, JPMorgan Chase and Morgan Stanley — hauled in $52 billion of the top five’s $67 billion in equities revenue through September, nearly 80% of the total. Goldman Sachs is leading the pack: Its equities revenue grew 57% this year to more than $19 billion, edging out Morgan Stanley (~$17 billion) and JPMorgan (~$15 billion). Bank of America’s and Citigroup’s totals meanwhile were in the single digits.

Looser leverage rules are helping banks do more business with hedge funds, which are looking for new funding to finance their AI bets.

Insatiable Hedge Funds

Hedge funds are hungry for financing, making prime brokerage big biz for banks. Goldman Sachs saw equities financing surge 96% last quarter. JPMorgan CFO Jeremy Barnum said in the company’s third-quarter earnings call that one analyst’s point about “insatiable demand for capital” felt about right to him.

That appetite could be a cause of concern. Too much leverage could make an AI bust, if one comes, swift and severe:

• Hedge fund assets grew to $13 trillion earlier this year, the International Monetary Fund estimated this month, up from $4 trillion in 2013. Most of that growth came from leverage, which the IMF warned could make markets more volatile under stress. JPMorgan CEO Jamie Dimon told CNBC in August that margin debt was the highest it’s ever been, pointing in part to hedge funds and prime brokerage.
• Hedge funds did pare back some leverage last week, dumping tech stocks at the fastest pace in at least a decade, according to Goldman Sachs. Their net leverage hit a one-year low. Still, tech made up nearly a quarter of what Goldman’s hedge fund clients held as of Oct. 15.

Too Big To Care: Hedge funds are well aware of the risks associated with leverage. The collapse of Situational Awareness this summer showed what happens when leveraged bets go sideways. Its highly leveraged AI trades blew up during July’s chip-stock rout, and other smaller hedge funds struggled alongside it. The banks that funded those trades could handle the hit. A full-blown AI bust could be a different story, but so far, the pain has largely stayed on the hedge funds’ side.

Who’s calling the shots?

Last week, REX Shares launched the REX Peptide ETF (PEPT), which holds companies (including pharma giants Eli Lilly and Novo Nordisk) that develop and manufacture peptide products, like GLP-1s. AdvisorShares has filed for a competing product, the Peptide and Human Enhancement ETF. There is a growing list of products that try to cash in on the wellness zeitgeist — but much as with GLP-1 users, appetite may be suppressed.

“This all started with the broader interest in peptides that has come both from the GLP-1 revolution as well as the more tongue-in-cheek, gray market peptide stuff that you see on social media,” said Bill Birmingham, head of research at REX Financial. “We found that there are many companies that sit outside of the Lilly/Novo duopoly that are starting to emerge with treatments for other big diseases.”

Wellness Dot Com

The global wellness industry is a $2 trillion market and growing. As the boomer generation ages, more people need healthcare, and Gen Z and millennials drive 41% of US spending on wellness, despite only making up 36% of the adult population. “Investors are starting to look at healthcare more as a modern consumer, tech-type” investment, said Sylvia Jablonski, CIO at Defiance ETFs. “Healthcare is now this convergence of biotech, med tech, pharmaceuticals research and the internet.”

There are already a handful of funds riding the wellness wave:

• Tema has the Heart & Health ETF (HRTS), which invests in companies focused on chronic disease treatment and prevention. The fund is up nearly 7% this year with about $55 million under management.
• Defiance has several single-stock leveraged ETFs focused on companies in this space, like the Daily Target 2X Long HIMS ETF (HIMZ), with about $58 million under management, and the Daily Target 2X Long NVO ETF (NVOX) with about $39 million in assets.
• GraniteShares is prepping several single-stock leveraged ETFs focused on Strava, Oura and Whoop (which does wearable health tech). ProShares and Themes ETFs have filed for Oura funds as well.

All Quiet on the Wellness Front: Despite the impossibility of existing in the world without hearing the word “wellness” at least once a day, flows haven’t quite matched the hype. HRTS has lost $2.5 million this year, HIMZ has net inflows under $1 million and NVOX has a year-to-date outflow of $34 million, according to ETF.com. “Healthcare is seen as a little boring in a bull market,” said Yuri Khodjamirian, CIO at Tema. Still, investors shouldn’t write it off, he said. If “you look at next year’s earnings forecast by sector, healthcare is number two in terms of earnings growth after tech. … It’s defensive, it’s growthy and there’s a valuation opportunity, because people have kind of forgotten about it.”

Birmingham said he sees this as an opportunity. “I’d rather launch into a quiet equity market from a price perspective on these names than put something in at the top,” he said. “You don’t have to battle through stocks going down and coming back up again.”

There are many entitled characters in shows and movies, but our favorite might be Veruca Salt from “Willy Wonka & the Chocolate Factory.” Unlike the patient and good-hearted Charlie Bucket, Salt wants a lot and she wants it now, and for today’s family-run business owners thinking about the future, that attitude is a concern. (Cue the Oompa-Loompas.)

Thirty years ago, business owners were most concerned about competition, regulation and labor, according to research published at the time by the Family Business Consulting Group. A new study from the organization finds the top concerns are now about preparing the family for the future, especially preventing a sense of entitlement from taking root.

“The question for family businesses is no longer only if the business can withstand external pressures,” said Kristi Daeda, president and CEO of the FBCG. “It is increasingly, ‘Are we preparing the family to own this responsibly and with purpose?’”

Advisors working with business owners said that preparation for the next generation requires serious coordination and planning. Education, clear expectations and meaningful responsibility are how families build engaged stewards of wealth.

Silver Spoons

“When kids grow up with a luxury life or know their family has significant wealth, it can alter their perception of reality,” said Noah Damsky, principal at Marina Wealth Advisors. “Unfortunately, it’s challenging to instill this sense of urgency after they’ve grown accustomed to an entitled lifestyle.”

The fix? Lower their expectations. “Swap the [Mercedes] S-Class for a Civic,” Damsky said. “Eliminate the safety net to inspire them to achieve. Even better, start when they’re kids. Don’t lead them to believe your luxuries will automatically extend to them.”

Parents often struggle to facilitate honest conversations about money or business succession, said Brian Abatemarco, CEO of CedarStream Wealth.

“The financial education phase should start as early as possible and result in more responsibility for the children as they get older,” he said. “Money is an emotional subject that hinges on a family’s values. It needs to be responsibly disseminated to the next generation.”

Founders who earned wealth the hard way want their children to understand the effort, not just enjoy its rewards. That’s perfectly reasonable as a belief, but it’s not a strategy for inspiring the next generation, and entitlement grows in silence, advisors said.

Some values-building strategies advisors shared include:

• Asking heirs to work elsewhere and earn a promotion, before joining the family business.
• Giving together via donor-advised funds, where kids research and recommend grants to develop decision-making skills.
• Crafting (and frequently discussing) a family mission statement that turns unspoken values into shared guidance.

High Hopes. Despite their challenges, family business owners remain optimistic. Ninety-five percent of respondents to the FBCG survey expect revenue growth over the next five years, and the same percentage expect their businesses to remain under family control.