Liquid alternatives are back on investors’ agendas after a year of solid relative performance, particularly for systematic trend funds, which benefited from an eventful 2022.
These portfolios are designed to diversify a portfolio, primarily acting as a line of defence, by producing returns that are uncorrelated to those of stocks and bonds. These funds employ a wide range of sometimes complex tactics to achieve this. Having been out of favour for several years due to their inability to outperform broad indices tracking the equity and fixed income markets, liquid alternatives proved their value proposition last year, said Francesco Paganelli, manager research analyst at Morningstar. "Some of the largest players have not delivered on their promises throughou...
To continue reading this article...
Join Investment Week for free
- Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
- Get ahead of regulatory and technological changes affecting fund management
- Important and breaking news stories selected by the editors delivered straight to your inbox each day
- Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
- Be the first to hear about our extensive events schedule and awards programmes