Liquid Alternatives Mark Gains, Delivering on Diversification Promise

https://dailyalts.com/wp-content/uploads/2020/07/Liquid-Alts1.jpg

Liquid alternatives are showing strong performance amid the Covid-19 environment.  According to a new report from Lyxor Asset Management, undertaking for collective investment in transferable securities investments (UCITS) employing alternative strategies are doing particularly well.  Specifically, these investments are performing as designed, with their diversification benefits affording investors and their financial advisors the lower volatility and downside protection inherent in their construction.

Against the backdrop of the World Index dropping -20.94 percent in the first quarter, the Liquid Alternatives UCITS index was down only -7.49 percent, with the variance even greater to the Liquid Alts benefit moving through Q2. Among the investments that did particularly are long-short equity funds, merger arb, discretionary equity and relative value.  

According to European Head of Hedge Fund Research Bernadette Busquere, credit markets will be attractive due to inefficiencies, equities will be valuable due to stabilizing companies, and relative value will be optimized due to currency and fixed income.  She states that UCITS will continue to be sought after in future years as they will provide more options for capital investments in liquid structure.  Liquid alternative strategies will continue to grow as investors seek downside protection and avoid volatility.  

Chief client officer of Lyxor Asset Management Nathan Benzaken stated “We believe allocating to liquid alternatives makes even more sense in the current context.  In fact, against all odds, with major indices rallying back to near pre-crisis levels, it may even be more relevant now to consider building or adding to a diversification portfolio.  Despite risks and uncertainties remaining high, the coronavirus crisis has created major dislocations that can be monetised by hedge fund managers.”  Ultimately, this is good news for the liquid alternatives industry.  The prospects of stron diversification benefits going forward for investors remain very strong with liquid alternatives continuing to shine in today’s unprecendented volatility. 

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Shape

Latest Alternative Investment News

https://dailyalts.com/wp-content/uploads/2020/08/Blackstone.jpg
Blackstone Acquires Largest Consumer DNA Database
August 7, 2020     Alternative Investments, Private Equity

Private Equity Meets Both Privacy Concerns and Major Growth in Next-Generation Industry.  The PE space is buzzing over private equity giant Blackstone’s acquisition of DNA testing company Ancestry.  The firm…

https://dailyalts.com/wp-content/uploads/2020/08/Ares.jpg
Private Equity: Ares Raises $5 Billion En Route To $30 Billion 2020 Haul

Ares Leapfrogs Competitors Through Pandemic.  Investment firm giant Ares has raised $5 billion for its private equity fund in the second quarter.  The firm’s goal is to raise up to…

https://dailyalts.com/wp-content/uploads/2020/08/row-houses-384596_640.jpg
Alternative Investments/Real Estate: HOMZ ETF Issuer To Ring NYSE Closing Bell To Mark Fee Cut
August 6, 2020     Alternative Investments, News, Real Estate

The Hoya Capital Housing ETF (NYSE: HOMZ) announced Wednesday a cut in its expense ratio from 0.45% to 0.30%, effective from August 1, 2020. It claimed that it has the…

https://dailyalts.com/wp-content/uploads/2020/08/Hero-image-2.jpg
FinTech: Grab Financial Flags Off A Bouquet of New Services
August 6, 2020     FinTech, News

Grab Financial Group Expands Suite of Products Under ‘Thrive with Grab’ Strategy