Liquid Alternatives relative lack of performance

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
User avatar
Portfolio7
Posts: 437
Joined: Tue Aug 02, 2016 3:53 am

Liquid Alternatives relative lack of performance

Post by Portfolio7 » Tue Sep 25, 2018 4:50 pm

For anyone interested, an analysis of Liquid Alternatives (as a replacement to bonds) finds that a simple equity/bond approach worked best, within the bounds of their data (16 years). The analysis was based on Equities plus a single diversifier, there weren't any multi-alternative comparisons examined in this article. The time period was one of strong bond returns & etc, but I thought it an interesting piece of work.

From the Conclusion:
In this case, the risk-return ratios would have improved in all three scenarios compared to the S&P 500 on a stand-alone basis, demonstrating the benefits of diversification. However, adding an equivalent allocation to 10-year US Treasury bonds would have meant better risk-adjusted returns.


https://www.factorresearch.com/research ... ive-enough
article originally published in the CFA Institute’s Enterprising Investor blog
An investment in knowledge pays the best interest.

Post Reply