In this video, Nadia Papagiannis, investment strategist at Goldman Sachs Asset Management, tackles the issue of the true liquidity of liquid alts. Ms. Papagiannis counsels investors to “look under the hood” of the alternative mutual fund in question, to examine the actual contents of the fund. For example, equities are usually more liquid than credit, so an alternative strategy that is heavily invested in credit may be less liquid than one focused on equities.
There are SEC rules that govern mutual funds, though, so Ms. Papagiannis doesn’t see much reason to be overly concerned. She reminds investors that there will always be securities of every type that are more or less liquid than others, and the relative liquidity depends on the various factors that govern the market. Currently, Ms. Papagiannis sees no “liquidity crunches” on the horizon for investors.
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