How to think about alternatives
Once the exclusive domain of institutional investors, alternatives have become widely available to advisers and investors. They've gained popularity in large part because they promise diversification beyond traditional stocks and bonds.
Today, investors have more alternatives to choose from than ever
Source: ProShares
Alternatives are used either to capture return or manage risk
Source: ProShares
What’s the right mix?
Source: Bloomberg. Hedge Funds = HFRI Fund Weighted Composite Index, Long/Short Equity = HFRI Equity Hedge (Total) Index, Merger Arbitrage = HFRI Merger Arbitrage Index, Managed Futures = Credit Suisse Managed Futures Index, Private Equity = S&P Listed Private Equity Index, Global Infrastructure = S&P Global Infrastructure Index.
Individual strategies within an alternatives allocation
Source: ProShares
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