“Many of the advisors who have
tapped into these new resources for
their clients have never utilized the
firm’s model portfolios before. And
advisors are using these strategies with
multiple clients; a sign that it’s not only
clients who are interested in responsible
investing, but advisors themselves are
convinced of the value of the investment
strategy,” she explained.
While not a “new” portfolio trend, the
use of alternative investments (or alts)
is growing in importance as a source of
new alpha and for hedging strategies. It
also covers a lot of ground, from liquid
alts to futures and options to private
equity and beyond.
“There is an increased interest in
non-historically correlated alternative investments as evidenced by the
standing-room-only breakout session that I hosted at the
Inside ETFs conference,” said Vance Barse, wealth strategist and founder of Your Dedicated Fiduciary, affiliated with
“There is an increased appetite for knowledge of alternative investments. What are they? How do they work? How
should they be — or not be —incorporated into portfolios?
Advisors don’t have much experience with [alternatives] and
the concern is that [they] might be in the late cycle [of using
them] at the moment,” Barse explained, generally referring to
“The asset class [overall] needs to be demystified, because
there’s a lot of misunderstanding on how the underlying
investment strategies work in a portfolio,” he said.
RBC’s Senne agrees and says her firm has been building out
its alternative investments space “and making sure that we
have a good, diverse selection of investment solutions for those
asset classes as well.”
Taking a broader look at the alternatives space, Lou Lemos,
chief administration officer of Luma Financial Technologies,
believes now is the time to look at other risk-based solutions.
“Structured products are increasingly being utilized in
portfolio construction due to their potential to provide investors with a more predictable investing experience by elevating
the certainty of reaching their desired outcomes,” Lemos said.
“As the market volatility increased over the last month, the
TD Asset Management’s latest alternative investment
solution is the TD Greystone Global Real Estate Fund.
The new fund joins the firm’s comprehensive alternative
suite that includes real estate, commercial mortgages and
The fund’s investment objective is to “seek strong long-term, risk-adjusted returns by investing in a diversified portfolio of direct and indirect global real estate investments,”
according to the company. The fund has exposure to over
500 properties located in about 15 countries, it said.
“As investors increasingly look to manage portfolio risk,
there is now a greater demand for adding a global real estate
allocation that can complement an existing Canadian real
estate mandate by providing additional diversification, a
greater opportunity set, and the potential to enhance risk-
adjusted returns,” said Colin Lynch, vice president and direc-
tor of global real estate investments at the firm.
The new fund provides “access to the benefits of privately
held global real estate assets,” he said in a statement.
T-Rowe Price made enhancements to its target date retire-
Liquid Alternative Fund Categories’ Positive Weekly Inflows 2019
ment product portfolios that it said are “designed to help
improve retirement outcomes and address the headwinds
investors face in achieving retirement security, including lon-
gevity risk, inflation risk, and market risk.”
As part of what it called the “next evolution” of target date
retirement products, the firm said that, “over a two-year peri-
od” starting this April, it plans to “gradually increase” equity
Number of positive
weekly flows for the year
Percentage of weeks in
year with positive flows
Real Estate 7 13.46%
Commodities-Broad Basket 5 9.62%
Options Based 45 86.54%
Managed Futures 2 3.85%
Market Neutral 46 88.46%
Multi-Alternative 16 30.77%
Multi-Currency 5 9.62%
Long-Short Credit 3 5.77%
Long-Short Equity 0 0%
Bear Market 21 40.38%
Convertibles 26 50%
Equities Precious Metals 18 34.62%
Energy Limited Partnerships 17 32.69%
Source: Morningstar, Dec. 31, 2019