Tue, Mar 19, 2024
A A A
Welcome Guest
Free Trial RSS pod
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: Is now the time to invest in alternatives?

Tuesday, December 05, 2017

Walter Davis, Alternatives Investment Strategist Invesco

I recently have been traveling around the country participating on a panel titled: "Alternatives: Time to Buy When Others Are Selling?" Spoiler alert - my answer to that question is a resounding "yes." There are two reasons why. First, looking back over the past 20 years (as shown in the chart 1 below), a portfolio holding a diversified set of alternatives would have generated higher returns with lower volatility and a lower maximum decline when compared to a standard 60% stock/40% bond portfolio.

Second, the most common mistake I see investors making with regard to alternatives is investing "after the fact." In other words, they add alternatives to portfolios following a period when equities struggled and alternatives performed well.

For example, many investors flocked to alternatives in the five years following the global financial crisis of 2008 (GFC), seeking to generate returns and reduce risk. However, the benefits of diversification may have been better realized if investors held alternatives before the 56% decline in the S&P 500 Index that occurred during the GFC.

Why haven't investors embraced alternatives?

We are in the midst of an unusual period in financial markets, featuring extremely accommodative monetary policy by the world's central banks, historically low interest rates, and a US stock market that is generati......................

To view our full article Click here

Previous Opalesque Exclusives                                  
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. KKR raises $6.4bn for the largest pan-Asia infrastructure fund[more]

    Laxman Pai, Opalesque Asia: The New York-based global investment firm KKR has raised a record $6.4bn for its second Asia-focused infrastructure fund, underlining investors' continued appetite for private markets. According to a media release from the alternative assets manager, the figure top

  2. Bucking the trend, top hedge fund makes plans for a second SPAC[more]

    From Institutional Investor: SPACs aren't dead. At least not to the folks at Cormorant Asset Management. The life sciences firm, whose hedge fund topped its peers in 2023, is confident it will match the success of its first blank-check company. Last week, the life sciences and biopharma speciali

  3. Benefit Street Partners closes fifth fund on $4.7 billion[more]

    Bailey McCann, Opalesque New York: Benefit Street Partners has closed its fifth flagship direct lending vehicle, BSP Debt Fund V, with $4.7 billion of investable capital across the strategy. Benefit Street invests primarily in privately originated, floating rate, senior secured loans. The fun

  4. 4 hedge fund themes that are working in 2024[more]

    From The Street: A poor earnings report from Tesla (TSLA) has not hurt the indexes on Thursday. The decline in Tesla stock, which is losing its position in the Magnificent Seven pantheon, is more than offset by strong earnings from IBM (IBM) and ServiceNow (NOW) . In addition, the much higher-t

  5. Opalesque Exclusive: A global macro fund eyes opportunities in bonds[more]

    Bailey McCann, Opalesque New York for New Managers: Munich-based ThirdYear Capital rebounded in 2023, following a tough year for global macro. The firm's flagship ART Global Macro strategy finished the year up 1