After the underperformance of stocks and bonds last year, it’s no surprise that diversification strategies are a significant focus this year. Alternatives continue to garner advisor and investor interest as market dispersion grows, including managed futures and long/short strategies.
Though inflation continues to cool, there remains a potentially longer road ahead to get to the Fed’s desired 2%. In an environment of uncertainty and elevated inflation, the inclusion of managed futures in a portfolio made a significant difference in the last few years as modeled by DBi recently.
Confounding market and economic signals persist as the year’s end draws near. In a year punctuated by heightened uncertainty as investors attempted to navigate a confluence of risk factors, stock and bond correlations proved a significant challenge to traditional portfolios.
Advisors face a number of challenges in current markets, given risks and stock and bond correlations. They must grapple with how to invest smartly as well as keeping their clients invested in the traditional 60/40 portfolio.
It’s been a great year for alternative income strategies as inflation, interest rate, and recession risk fears dominated markets. Garrett Paolella of NEOS and Christian Magoon of Amplify ETFs joined VettaFi’s Tom Lydon to discuss alternative income opportunities at the Income Strategy Symposium hosted by VettaFi on October 27.
Given concentration risk, understanding what a strategy and portfolio owns is more important than ever in current markets.
The biggest growth companies continue to increase their concentration in major equity indexes this year. It’s not surprising that investors are starting to rethink their exposure to large-caps, given concentration risk and ongoing market uncertainty.
In an environment of pronounced volatility and less-than-certain equity and bond performance in the last few years, investors are leaning toward more complex strategies such as alternatives.
The United States Court of Appeals announced this morning it’s ruling in favor of the Grayscale petition to convert its flagship fund, GBTC, to a bitcoin ETF. In the intricate game of chess the SEC plays with bitcoin funds, it’s a “check” for Grayscale’s white knight strategy.
Increasingly more advisors and investors are discovering the benefits of options strategies in their portfolios. There is great value in understanding and utilizing options strategies with the range of benefits they can provide portfolios, including protective puts.
It’s been a challenging year for many managed futures strategies but they continue to offer long-term potential for portfolios. The benefits of trend-following strategies are numerous and worth consideration for inclusion in any alternative sleeve.