Evaluating Alts: Essential Criteria

The popularity of alternative investments continues to increase.

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Comments (2)
The point of positive expected returns is a very good one. Unfortunately, Morningstar may not be the best source, or at least shouldn't be the only source, in determining how these asset classes will perform. I could argue about whether Managed Futures is actually a zero-sum game, but there is little debate that Managed Futures suffer from low interest rates because of the amount of cash they must hold, and the Federal Reserve manipulation of markets has really done a number on trend-following strategies. To understand how Managed Futures perform in the absence of QE requires looking at how the privately-managed accounts performed before they were reorganized as 40-act funds and Morningstar began following them. At least some of the long-term returns are pretty impressive if you assume that QE is an anomaly that will not be repeated anytime soon.
Posted by JERRY V | Monday, June 02 2014 at 8:18PM ET
We have a CTA fund here in Australia targeting vol of 16 that has punched out 15%pa since inception a little over 6 years ago. Also a multi-strategy/multi- manager Fund that has done around 7% with a vol of 5.

blueskyfunds.com.au
Posted by Vaughan H | Wednesday, July 02 2014 at 9:30PM ET
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