Alternative Investments Yielding Strong Diversification Outcomes
Democratizing of Alts Continues Globally.
Alternative investments increasingly are in the spotlight for market observers who see their strong outcomes in today’s volatile market environment. These investments include, for example, managed futures, commodities, hedge funds, and private equity. The world of alternative investments is continuing its transition from a relatively exclusive investment asset cateogry for institutions and high net work invetors, to a key investment option accessible to individual investors.
What to Consider
One of the key differences between Alts and traditional stocks and bonds is that Alts can allow for greater diversification benefits, while also offering exposures far beyond traditional stock and bond options. Real estate investment trusts and venture capital funds are among some of the other alternative investment options. Alternative investments are appealing because not only are they becoming more accessible to investors, but they are minimally correlated to stocks and bonds. Alternative investments sometimes are implemented to effect a hedge against market volatility, while providing risk mitigation and downside protection. Especially given the economic uncertainty looming from the COVID-19 pandemic and the upcoming U.S. presidential election, investors are looking to alternative investments to smooth out their portfolio outcomes in the months ahead.
History and Outlook
Historically, alternative investments have fallen less when compared to the broader market following a recessionary period. For instance, in 2009, the S&P Total Return Index declined 11 percent while the Barclay BTOP 50 Index — which tracks managed futures funds — fell by only 1.8 percent. This same phenomenon has occurred during a broad range of market drawdown periods and, therefore, institutional and individual investors alike are putting Alternative Investments back in focus to best position their portfolios for the balance of 2020 and beyond.
Latest Alternative Investment News
FinTech: Klarna’s All-In Efforts To Achieve Profitability Getting Traction
Swedish fintech company Klarna achieved a significant improvement in its financial performance during the first quarter, as it halved its net loss compared to the same period last year. The…
Alternative Investments/AI: Euclidean Technologies Launches ETF For AI-Selected Value Stocks
Seattle-based investment advisor Euclidean Technologies Management has launched its first exchange-traded fund (ETF), the Euclidean Fundamental Value ETF (ECML US). The actively managed US equity fund utilizes artificial intelligence (AI)…
Venture Capital: Matrix Partners Raises $550M For Its Fourth India Fund
Matrix Partners India, a venture capital firm focused on investments in India, has announced the closure of its latest fund, securing over $550 million in commitments. This new fund from…
Artificial Intelligence: AI Helps Researchers Find A Compound To Kill The Drug-Resistant A. baumannii Bacterium
Scientists at MIT and McMaster University have used artificial intelligence (AI) to identify a new antibiotic that can combat drug-resistant infections caused by Acinetobacter baumannii. The bacterium is commonly found…