Alternative investment strategies have historically been used only by the most sophisticated market participants, such as institutional investors and hedge funds. Liquid alternative strategies however could give market participants better access to alternative investments.
Over the past year, investors have witnessed a strong upswing in real estate activity, and this is set to continue for most parts of the sector. The global coronavirus pandemic created divides in performance between various areas in the asset class, with notable winners being logistics and suburban properties, and the losers…
As 2022 lumbers on, investors are looking for ways to protect their assets from rising levels of inflation. With volatility in equity markets and continually low yields in fixed income markets, many investors are unsure about how best to invest their funds.
The recovery from the worst of the global coronavirus…
Managed futures (CTA) strategies tend to perform well when traditional 60/40 portfolios do especially poorly, like during recessions and periods of unexpectedly high inflation. Given the current macroeconomic outlook, CTAs may provide a measure of portfolio protection and can be thought of as a possible inflation hedge.
When looking for a strategy to perform best at the extreme ends of market returns, investors often turn to guaranteed but expensive put and call options to provide convex returns. The multi-asset nature of trend-following helps provide much-needed diversification to a tail hedging strategy – not least in an environment where…
Alternative investments are attracting ever more investors. According to the Chartered Alternative Investment Analyst (CAIA) Association, between 2003 and 2018, the size of the global investment market doubled, while alternative investments almost tripled to $13.4 trillion. This would mean around 12% of worldwide investments…
How should investors select the most suitable types of hedge funds for specific roles? Members of our Investment Strategy & Solutions Group offer a simple and intuitive framework that can help.
We analyze the historical macroeconomic sensitivity of traditional asset classes and major hedge fund strategies. We show that the average hedge fund is unlikely to provide meaningful diversification during periods of macro uncertainty, which are also typically difficult for traditional assets. However, long/short low-risk…
Aurum's 2023 hedge fund industry deep dive is now available, providing insights and analysis on industry performance, dispersion, asset flows and fees. Five-year asset-weighted net performance (CAR) for hedge funds now stands at 6.5%, comfortably outperforming bonds (-0.4%) but underperforming equities (+9.4%) from a total…
We are entering an unusual period for global economic policy, with predictions of multiple rate cuts despite none of the usual reasons for looser monetary policy.
US stock-bond correlation, which plays an important role in institutional portfolio construction, has been persistently negative for the last 20 years. This negative correlation allows stocks and bonds to serve as a hedge for each other, enabling CIOs to increase stock allocations while still satisfying a portfolio risk…
Firms that allocate assets are, for a second year in a row, more interested in hedge funds that invest in credit than in any other hedge fund strategy.
Pension funds rely on interest rate swaps to hedge the interest rate risk arising from their liabilities. Analyzing unique data on Dutch pension funds, we show that this hedging behavior exposes pension funds to liquidity risk due to margin calls, which can be as large as 15% of their total assets. Our analysis uncovers…
Towards the middle of last year, our expectations for US growth grew more optimistic. We maintain a similar sentiment heading into 2024 as we believe that termed-out household and corporate debt, rising real wages, and easing financial conditions should continue to support spending, making recession a low probability event…
Wilshire's Alternatives 2024 Outlook updates readers on the future prospects for private equity, private real assets, venture capital, infrastructure, private credit, and hedge funds across the U.S., Europe, and Asia Pacific.
This edition marks the eleventh edition of our 50 Leading Women in Hedge Funds report and is published in association with EY for the tenth time. Seven firms are featuring for the first time: alternative credit manager, 400 Capital Management; managed futures multi-manager, Abbey Capital; illiquid alternatives specialist,…
In the October Chart Pack investors can explore data behind three key developments: the changing global economic order, the shifting focus within the commodities markets, and the growing universe of ETFs. Will growth fall short of expectations? Where can investors find a hedge against uncertainty? Are ETFs still good to…