More registered investment advisers are starting to place client assets in alternative investments, according to Rydex AdvisorBenchmarking.
The study was conducted online with 333 RIAs participating in November 2006.
Forty-two percent of advisers have increased their use of alternatives moderately from 0% to 25% in the past five years, and 24% of advisers have increased their use of alternatives by 100%.
“As markets become more challenging, RIAs are seeking new ways to help their clients
reach their investment goals,” said Maya Ivanova, research analyst. “Our survey indicates that nearly one fourth of advisers believe that [alternative investments] will be more important than traditional investments, such as stocks, bonds and cash, in the coming years.”
The reasons advisers are enthusiastic about alternatives vary. Forty percent stated they have turned to alternative investments for different investment techniques, 38% stated seeking absolute returns, 29% said to fill portfolio allocations, 28% addressing portfolio correlations, and 25% said seeking unique vehicle structures.
Exchange-traded-funds were the investment of choice, with 37% of advisers stating ETFs have helped increase their business since 2001.