What Role Can Alternatives Play in Your Portfolio?

After the disastrous performance of illiquid hedge funds in 2008 and the subsequent failure of many UK Absolute Return funds, it is easy understand why investors are wary of Alternatives

Psigma Investment Management 20 November, 2014 | 3:55PM

Morningstar's "Perspectives" series features investment insights from third-party contributors. Here, Tom Becket, Chief Investment Officer for Psigma, discusses how investors can incorporate alternatives into their portfolio.

One of the more emotive subjects we face in our working lives is Alternative investments. After the disastrous performance of illiquid hedge funds in 2008 and the subsequent failures of many natural Alternative strategies, chief amongst them UK Absolute Return funds, this is easily understandable. There have been long periods where a number of Alternative investments in the market-place just haven’t justified their existence and often high fees.

We place a great deal of value on Alternative strategies and have found that they can be very useful in helping us to achieve our long term aims on behalf of our clients. However, our greater admiration for Alternatives can perhaps be best explained by our definition of an Alternative and how we use them within portfolios.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
AS SICAV I Asn LcCy STBd I QIncHGBP7.11 GBP0.00
Odey Odyssey I GBP Inc96.35 GBP0.92
RWC Enhanced Income Fund A GBP Acc96.96 GBP-2.52

About Author

Psigma Investment Management  Psigma are part of the Punter Southall Group, a diverse financial services organisation offering a unique combination of actuarial, pensions consultancy, administration and investment services.

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