Liquid Alternatives: Retail Investors Can Use Alternative ETFs To Their Advantage

September 24, 2020 | Liquid Alternatives, News
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Alternative ETFs are low-cost, liquid, and not restricted to accredited investors.

Krista Hicks, senior vice president of business development at Horizons ETFs, will speak at the WP Advisor Connect virtual event on Thursday, September 24, 2020. The virtual event is themed “The Rise of Alternative Investments” and aims to deliver a comprehensive view of the world of alternative investments.

Hicks will participate in the workshop “Why alternatives should have a place in your portfolio” led by Women in ETFs.

She discussed her views on alt ETFs with Wealth Professional (WP) and here are the highlights from the conversation. (WealthProfessional.ca)

Krista Hicks on Alternative ETFs

  • Retail investors can access alternative strategies once available only to accredited investors…
  • …at a lower cost
  • …and gain a much more liquid exposure to these strategies
  • The shortcomings of the [60:40] mix were exposed during recent sell-offs
  • Alternative ETFs offer retail investors uncorrelated benefits
  • …also, an opportunity to get their foot in the door of alt investing with a much smaller outlay
  • Real estate, infrastructure, private equity, and private debt are too illiquid to package into an ETF
  • However, long-short equity stances, market neutral stances, currency plays, and commodities holdings can be wrapped inside an ETF…
  • …also managed futures, hedge fund performance, or index replication strategies
  • Retail investors should recognize that fixed income is simply not enough for sustenance when longevity is increasing, comments Hicks
  • A 10% portfolio allocation to alternative ETFs could help boost income streams, yet provide “ballast”
  • Alternatives could be a tool to rebalance portfolios skewed by the recent market excesses seen in runaway equity and low-yielding fixed income.

Related Story:   New Challenges for Pension Financing and Retirement Security (Bloomberg Women’s Buyside Network)

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