Liquid Alternatives: Enhancing Expected Returns

Estimating expected returns is perhaps the most important factor in making investment decisions. We believe the most consistent way to meet return targets is to harvest returns from diverse sources. 

What this chart shows

The chart below plots the current yield on a conventional 60/40 stock bond portfolio. Currently, the yield is at an all-time low, indicating that expected future returns may be lower than historical norms would suggest. 

What it means for investors

In order to meet long term goals, investors may be inclined to compliment traditional strategies with alternative strategies. Alternatives investment strategies tend to produce diverse performance patterns, typically uncorrelated to traditional stock and bond strategies. The chart to the right shows how utilizing alternatives may help enhance portfolio returns, reduce risk and provide downside protection. 

Current yield on traditional 60/40 portfolio

60-40 Portfolio

 

 

 

 

 

 

 

 

 

Benefits of using alternative ivestment strategies 

Stock and Bond and Liquid Alternatives Table

Benefits of Liquid Alternatives

Download PDF