Liquid Alternatives: Allspring Global Investments Recommends Liquid Alternatives As Foil To The 60/40 Portfolio

Allspring: The bond, equity slump last year is a wake-up call.

Allspring Global Investments is expanding in Asia to meet rising demand for multi-asset strategies from wealthy investors and institutions looking to minimize risk after both equities and bonds fell last year. The US asset manager suggests allocating more to liquid alternatives, which provide quick liquidity and behave differently from traditional asset classes.

Eddie Cheng, head of international multi-asset portfolio management at Allspring, said investors need to think about diversifying away from traditional [60:40] asset allocation, with an increasing appetite for alternative assets among its clients. (Yahoo Finance)

The MSCI All-World Index fell almost 20% last year, while 10-year Treasury yields spiked to 3.88% from 1.52%.

Allspring has expertise in liquid alternatives such as long-short strategies. The firm established an office in Hong Kong in January and is reaching out to institutions such as sovereign wealth funds and pension plans, as well as private wealth clients. It has US$463 billion of assets under management, and has noted a steadily improving appetite among its clients for alternative assets.

“Between liquid securities and very illiquid assets, there is a third role – liquid alternatives, which our team has expertise in, running the strategy for many years already,” said Linda Luk, head of sales for North Asia. “Now we think that is a great opportunity to introduce it to high-net-worth individuals.”

Cheng said the classic [60:40] allocation strategy will continue to dominate investment portfolios for both institutional and retail investors, but investors need to improve it.

Related Story:  Man Group Anticipates Higher Demand For Liquid Alternatives This Year

Image by kalhh from Pixabay

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