Investors are facing a challenging period for earning what they spend and achieving adequate portfolio diversification. With most DM sovereign bond yields near or below zero, expected returns for bonds are at all-time lows and diversification qualities are constrained. In this edition of VantagePoint, we evaluate defense and diversification options to identify a modern approach to diversification in this low-yield era.
In our view, hedge funds are a critical component of a strategic asset allocation and play an important role in long-term alpha generation as well as beta and correlation mitigation strategies. However, across strategies only a very small number of funds offer an appropriate level of risk-adjusted returns, and identifying those funds takes considerable time and resources.
Our hedge fund professionals diligently review the broad universe of hedge fund opportunities, identifying managers early in their life cycle and forming long-term business partnerships with those that we expect to generate attractive and sustainable risk-adjusted returns.
Our hedge fund expertise spans an array of strategies including long/short equity, event-driven, credit-focused, and global macro. Over the last four decades, our clients have benefited from the differentiated return streams, capital protection, and reduced volatility offered through these strategic partnerships.
Recent years have seen challenges for hedge funds and a shift toward low-fee passive and alternative risk premia (ARP) products in investor portfolios. In this paper, we investigate whether ARP and hedge funds are complementary or whether ARP funds are actually a viable replacement for hedge funds.
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Yes, because rising concentration reflects rising valuations for the largest stocks, which are likely to serve as a headwind to index returns. Further, the growing market share of these companies increases the potential for rising regulatory oversight.
Investors have predominantly relied on developed markets sovereign bonds for defense in balanced portfolios, but low rates have diminished their diversification characteristics.
Private investors and wealthy families face distinct portfolio management complexities. Our latest paper details how we build and manage portfolios to meet each private client’s long-term goals.
Register today for our Private Investments Summit on March 11th from 10:30am – 3:00pm ET. Join us as we uncover how investors can maintain long-term focus on private investments, while enduring volatility from all sides. If you’re interested, please email firstname.lastname@example.org
As 2020 comes to a close, we expect some key investment drivers to persist into next year. While our views speak to many different challenges confronting investors, including the poor bond yields on offer, the fate of US-China relations, and where to find growth, they are rooted in the belief that 2021 will be a year of healing for the global economy.
Healthcare systems appear to have navigated the most severe financial impact of the pandemic. We believe the present time provides an opportunity to reset investment strategy and recalibrate portfolios as necessary.