We just couldn’t get enough of the conference action last week with the NIBA and the CTA Expo, and spent the beginning of this week exploring what the “Alternative Investments Conference” has to offer. Here are some highlights from day one yesterday:
In her conference opening presentation, Demystifying Alternatives: The ABCs of Alternative Assets, Strategies and Vehicles, Nadia Papagiannis of Morningstar Inc. suggested that alternative investments should receive a larger portion of portfolio allocation (we covered that a while back, why you’re not happy):
“Five percent is really not going to make a difference” said Ms. Papagiannis on Monday, “but 20% will start to make a difference.”
“If I were doing it, I would pick an equity long-short strategy, a managed-futures strategy and a market-neutral strategy as a kind of bond substitute, and I would equal-weight them into the portfolio,” said Papagiannis. “Prior to 2008, a lot of investors were too heavy into equities, and now a lot of advisers are telling me their clients are too heavy into bonds.”
As part of a panel discussion entitled The Alternative Asset Allocation Model, Steve Medina, Head of Global Asset Allocation & Senior Portfolio Manager at John Hancock suggested advisers should look to balance their portfolio better by funding an alternatives allocation half from equities and half from bonds.
“If you fund alternatives 100% from bonds, you’ll get better returns but get an increase in risk,” said Medina. “If you fund 100% from equities, you will reduce the overall risk, but there’s a cost to that and you will hold back a little bit of total return over time. Therefore, start with the concept of funding half from equities and half from fixed income.”
Due diligence was another popular topic on day one. According to David Lafferty, an investment strategist at Natixis Global Asset Management, most investors follow one of two different approaches with regard to due diligence.
“There are those people who are looking for great returns, and they will pay a lot of attention to a track record even if they don’t fully understand the strategy. And there are those who will like the story and the strategy, and they don’t care as much about the track record,” said Lafferty.”
Members of the Attain team are over there again today for Day 2 and we’ll bring you more tomorrow.
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.
Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.
Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.
Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.
Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.
RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.