The use of alternative investments in diversified portfolios has grown exponentially in recent years. Key drivers of this trend have been the search for downside protection, as well as seeking additional sources of returns in an extended low interest rate environment.
Improving Risk-Adjusted Returns
Historically, adding alternatives to a portfolio has helped improve the risk/return profile of traditional stock and bond investments. Alternatives can smooth volatility, enhance returns and reduce downside risk. The advent of liquid alternatives with lower minimums, daily liquidity, close regulation and 1099 tax reporting has expanded the access of alternatives to a much wider range of individual investors.
In, Are You Ready for an Alternative, our new white paper, we discuss the different types of alternatives, the growth in alternatives, and the potential benefits of including alternatives in your diversified portfolio.
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