Managed Futures In Favor As Alternative Asset Classes Become A Big Piece Of The Industry

Tuesday, December 13, 2011 09:20
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Managed Futures In Favor As Alternative Asset Classes Become A Big Piece Of The Industry

Once esoteric, derivatives and other "alternative" asset classes are becoming a key part of client portfolios even in the bread-and-butter wirehouses.

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According to reports, Cogent Research has discovered that a full 40% of wirehouse brokers have added managed futures and hedged products to their usual assortment of stocks, bonds, and mutual funds.

 

Naturally, these advisors are content to use in-house investments or products from blue-chip corporate allies -- money managers like PIMCO and BlackRock. 

 

But beyond the wirehouse, advisors interested in adding alternatives to their universe are going off the beaten path, drawing on about 300 vendors in total.

 

Strategies in favor include those managed futures and multi-strategy funds. Long/short and market-neutral strategies are no longer popular.

 

Many advisors dislike these products as untested or unsuitable for the typical client, as well as creating an occasional administrative headache.

 

For better or worse, clients are asking for them -- and other advisors are adding them proactively as the chase for returns and income in particular continues.

Comments (1)

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echeyne
I am on board of Not-for-profit that was pitched managed futures for part of endowment portfolio.Lack of familiarity and high fees are the main concerns.
echeyne , December 16, 2011

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