RT Journal Article
SR Electronic
T1 Alternative Lifestyle: The Evolution of Alternative
Investments
JF The Journal of Wealth Management
FD Institutional Investor Journals
SP 27
OP 40
DO 10.3905/jwm.2012.15.1.027
VO 15
IS 1
A1 Robert Mileff
A1 Nathan Sonnenberg
A1 Scott Welch
YR 2012
UL https://pm-research.com/content/15/1/27.abstract
AB Opinions and the use of alternative investments have fluctuated wildly since they became popular with high-networth (HNW) investors in the early 1990s. In the early years, investors accessed alternatives primarily through “absolute return,” hedged equity, and managed futures strategies. Many investors deployed alternative investment at the implementation stage rather than the allocation stage of portfolio construction, carving out some portion of their fixed-income allocation for absolute return strategies and some smaller portion of their equity allocation for hedged equity and CTA strategies. Times became somewhat more difficult after the 2008 crisis. The article first revisits the argument for including alternatives within diversified portfolios. It then analyzes the trends and developments in alternative investing over the past five years and discusses how they dictate a different conversation with investors about their purpose, acceptable or unacceptable trade-offs, and appropriate ways to incorporate alternatives in well-diversified portfolios.TOPICS: Real assets/alternative investments/private equity, wealth management, portfolio construction