How beta is transforming hedge fund investing

ALTERNATIVE BETA

As investors increasingly push the boundaries in search of accessible alternatives, the alternative beta concept may become a significant part of investors' toolkit, says Olivia Mayell, client portfolio manager at J.P. Morgan Asset Management.

With bonds looking expensive, and many developed equity markets at fair value, alternative investments are being used by investors to help balance the risk trade-off between equities and bonds. Hedge funds have traditionally been a popular choice for uncorrelated returns, but only for those few investors able to afford the high fees and tolerate the illiquidity and limited transparency. There is an increasing demand among investors for the diversified exposure, common in alternative investment strategies, to be delivered more accessibly and more cost effectively. The rise of the ‘a...