This is a great article on the benefits of Liquid Alternatives (“Liquid Alternatives Coming of Age”)
One of the big lessons from the Global Financial Crisis (GFC) ten years ago was for investors to seek true portfolio diversification. Specifically, increase the diversification within portfolios so as to reduce the level of equity risk within them. Thus reducing the level of portfolio volatility. This will likely lead to better outcomes for investors in meeting their investment objectives over time.
For investors, increasing the level of true portfolio diversification comes with the added challenge of reducing costs, maintaining high levels of liquidity, and having transparency of the underlying investment strategies.
For these reasons Liquid Alternative strategies have gained increasing acceptance around the world.
The article covers the benefits of Liquid Alternative strategies and a variety of implementation approaches undertaken by a number of Australian Institutional Investors.
Liquid Alternative Investment strategies are a growing allocations across many investment portfolios globally and are an effective means of increasing the true diversification of a multi-asset class (diversified) portfolio.
I have written previous Posts on adding Alternatives to Investment Portfolios.
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