A portfolio can certainly benefit from these assets should investors be willing and able to find top managers, according to Richard Turnhill, global chief investment strategist at BlackRock. But Mr Turnhill says liquidity concerns and other requirements must be managed carefully.
He adds: “Many alternatives do not compensate investors generously for their illiquidity, but they offer diversification benefits and potential excess returns in the long run if investors can access top managers.”
Taha Lokhandwala is deputy editor at Investment Adviser
KEY NUMBERS
104
Number of investment trusts investing in alternative assets
160%
10-year return from the Citi WorldBIG Collateralised ABS index, 35 percentage points higher than the BAML Global Broad Market index
0.1
10-year correlation between private equity investment trusts and the BAML index
17.5%
Allocation to alternative assets for conservative investors in the Pimfa MSCI index series
