by
Senior Global Alternative Investment Strategist

Key takeaways

  • Alternative investments have provided enhanced diversification benefits over the latest U.S. market cycle (three and five years). When added to equity portfolios in recent years, alternative investments have outperformed other equity diversifiers such as fixed income and commodities.
  • The first-quarter financial-market turmoil reversed the recent positive-performance trend for hedge funds. Yet, hedge funds outperformed U.S. equities, commodities, and fixed-income classes (broadly speaking) during the quarter.

What it may mean for investors

  • As the U.S. economic expansion matures, we continue to see an improving environment for alternative investments, which may be better positioned to dampen volatility through short exposure and identify distinctive alpha-generation opportunities independent of broader equity directionality.

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