Alternative Investments

A Look at Managed Futures

In a recent article on Bloomberg.com, Ye Xie discusses one winner in the Brexit rout. Over the past few days, managed futures funds were one of the few investment classes to boast positive returns. One fund, AQR Managed Futures Strategy Fund, rallied 6.3% over the past 2 days (as of June 27, 2016). What are managed futures? Managed Futures are an example of an alternative investment which adds diversification...

More Collective Investment Trusts Being Added to DC Plans

There are now over 3,200 collective investment trusts (CITs) tracked in the Morningstar CIT database, collectively holding nearly $2 trillion according to a recent article that appeared on WealthManagement.com.  That’s up from $896 billion in 2008.  Callan Associates estimates that 71% of DC include at least one CIT in their plan up from 60% and 52% in 2014 and 2013, respectively Why are CITs becoming more popular?  Reasons included...

DC Plans Slow to Adopt Liquid Alts…But Why?

A recent article on Wealth Management.com titled “Liquid Alts in DC Plans? Don’t Hold Your Breath” discusses the relatively slow adoption of Liquid Alts by defined contribution (DC) Plans relative to what Defined Benefit Plans (DB) have done. The arguments for liquid alts, as the article presents, include managing return and risk management, managing volatility, potentially greater diversification, and a strategy less sensitive to broader equity and fixed income...

Prateek Mehrotra discusses the Endowment Model of Investing with Institutional Real Estate Inc

Prateek Mehrotra, CIO of ETF Model SolutionsTM,and our affiliate, Endowment Wealth ManagementTM, was interviewed this week by Institutional Real Estate Inc.  In the discussion, Prateek talks about the history of the Endowment Model and how the Endowment IndexTM was constructed.  Listen to the podcast. The podcast is for information purposes only and should not be considered personalized investment advice. Investments involve risk of loss and may fluctuate in value.  You should...

Real assets a crucial component in endowment portfolios

Real Assets, which consist of real estate, commodities, energy, infrastructure, natural resources and master limited partnerships are utilized by many of the nation’s wealthiest endowments, but individual investors can also benefit from incorporating real assets into their portfolios. Prateek Mehrotra MBA, CFA, CAIA, CIO of ETF Model SolutionsTM outlines how real assets can provide greater portfolio diversification and protection against periods of high inflation better than traditional stock and...

Global ETF/ETP Assets Forecast to Surpass Hedge Funds During Second Quarter

According to ETFGI, global assets in ETFs/ETPs are expected to exceed those in hedge funds.  At the end of the first quarter, ETFGI estimates that hedge funds contained just $13 billion less than ETFs/ETPs globally.  In Q1 alone, ETFs/ETPs gained $US96 trillion, compared to just US$18 trillion for hedge funds. Reasons for this growth include an “expanding toolbox of index exposures to various markets and asset classes, including hedge...

Algorithmic Hedge Strategies Outperform Human Managers in 2014

According to an article on CNBC this morning, systematic hedge strategies outperformed their human counterparts in 2014.  The best performing category within the segment was managed futures strategies, which gained 15.2% for 2014.  Falling oil prices, the climbing U.S. Dollar, and declining U.S. government bond prices were cited as trends that these funds were able to capitalize upon.  The entire article can be read here.

Whitepaper Provides Understanding into Various Alternative Asset Categories

A new whitepaper from Invesco discusses the difficulties in managing risk with strictly a 60-40 stock-bond portfolio and highlights some of the new alternative asset classes that advisors can use to help reduce risk in client portfolios. This is especially important for advisors, since 44% of advisors see managing risk for client portfolios as their #1 priority.  The paper discusses the weaknesses of MPT, how alternatives help with portfolio...

Investment News: “Alternatives: Key Piece of the Puzzle”

The case for traditional long-only allocations to stocks and bonds is getting weaker by the day, and that’s putting the financial advice industry, if somewhat reluctantly, on the junction of major change And so starts an extensive front-page article in a recent issue of Investment News.  The article goes on to provide a basic background of the growth of liquid alts with commentary from a number of advisors and asset...

Study Sheds Light on Private Equity Holdings of Public Pension Funds

The annual Private Equity Growth Capital examining private equity investments of over 150 U.S. public pension funds has been released recently.  The report contains tables and charts, organizing data collected by Bison.  A few highlights: U.S. public pension funds invest 9.4% of their portfolio in private equity (on a dollar-weighted basis) Based upon the four asset broad classes they analyzed (fixed income (5.6%), public equity (7.9%), private equity (12.3%),...