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B. G., Opalesque Geneva: There's a big tug of war in markets and the portfolios between offence and defence, which makes this environment right for alternative strategies, says Adam Hetts, Global Head of Portfolio Construction and Strategy, during a panel debate called Democratisation of Alternatives, at global asset manager Janus Henderson, adding that they are seeing more clients moving to liquid alternatives*, because of the market environment. Here, liquid alternatives' underlying investments are typically standard securities.
We've seen liquid alternative products being used by asset locators and investors in three areas, confirms Luke Newman, portfolio manager.
In the first area, investors are aiming to replicate or get close to equity-like levels of return, but without taking the associated levels of risk. Second, investors are investing on a risk budget basis rather than necessarily targeting a return. The final category seems to be accelerating: that's investors allocating more of their portfolio to alternatives as a diversifying asset class in its own right.
If done correctly, liquid alternatives could provide uncorrelated returns. They can also act as shock absorbers. And finally, they provide alpha generation. "So, that's why we've seen the usage of alternative assets increase in recent years."...................... To view our full article Click here
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