Investments, Financial Markets & Economy

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%),...

How To Invest Like The Ivy League Endowments with ETFs

Seeking Alpha published an article by Prateek Mehrotra outlining how ETFs can help investors build institutional quality portfolios diversified into liquid alternative investments designed to improve long-term risk adjusted returns. The article summary The country’s largest endowments aim to preserve capital while producing income and appreciation with less correlation to the stock market regardless of market conditions. Performance among Ivy League endowments and retirement plans that invest like them...

United States Commodity ETF files paperwork to be registered under Investment Company Act of 1940

United States Commodity Funds, the Oakland, California-based firm that did so much to popularize futures-based exchange-traded funds focused on commodities, has filed regulatory paperwork describing a broad commodity fund that qualifies for the same tax treatment as a plain-vanilla equity or fixed-income fund.   The USCF Dynamic Commodity Index Fund is being registered under the Investment Company Act of 1940, which means shareholders in the fund won’t have to file so-called...

Use of Liquid Alts Growing in Self-Directed IRAs

A recent article at WealthManagement.com discussed that interest in self-directed IRAs is growing.  A few reasons for this are that more people have begun to accumulate sizeable assets in their retirement plans. and are looking to diversify their portfolios beyond stocks, bonds and mutual funds.  As such, there tends to be a greater appetite for alternative assets such as real estate, precious metals, commodities, limited liability corporations and hedge funds. A...

ETF Model Solutions^TM in the News: Tactical Allocation Funds Prove Market Timing Is Just Hype

Tactical Allocation Funds Prove Market Timing Is Just Hype October 10, 2014 ETF Model SolutionsTM Chief Investment Officer, Prateek Mehrotra was published in an article on Seeking Alpha today discussing the poor results that tactical mutual fund managers have delivered to their investors.  The article discusses that in general, because of high fees and poor returns, investors would be better served by maintaining a pre-set allocation and periodically rebalancing. ...

Why have some target date funds recently increased their equity allocation?

Blackrock, Fidelity and Pacific Investment Management Co have increased their equity allocation within their target date funds in the past year.  These shifts have consultants, advisors and analysts questioning not only the reasons behind the move, but the potential consequences, especially if the recent market correction would expand.  A few excerpts: “The shared characteristic these funds have is they have not been doing so well since 2008. The question is...

Endowment Index^TM Asset Allocation and 10 Year Returns Compared to the Nation’s Largest Pension Fund

The nation’s largest pension fund, the California Public Employees Retirement System, better known as CalPERS has been in the news this week with an announcement that they are going to be liquidating their $4B hedge fund allocation over the next year.  Apparently, the high costs and complexities, combined with their ability to scale the asset class relative to their $300B portfolio just isn’t worth the effort. While on the surface this...

Investment News Webcast “Demystifies” Liquid Alts for Advisors

In a webcast presented by Investment News, Consuelo Mack interviewed Robert Jenkins, Managing Director/Global Head of Research for Lipper, Dr. Hossein Kazemi, Ph.D., CFA Senior Adviser to the CAIA Association’s Program, and Dennis Bowden Managing Director U.S. Research & Advisory at Strategic Insight.  The interview discussion centers around understanding and differentiating different types of alternative strategies and how they can best address a client’s needs. The webcast content also includes information on how to construct a well-diversified portfolio using liquid alternatives...