Alternative investment strategies can provide additional diversification and risk reduction benefits when added to a traditional stock and bond portfolio. During periods of persistently low interest rates and higher equity valuations, allocations to alternative strategies can provide benefits such as lower correlations to traditional asset classes and lower overall portfolio volatility.
Just as institutional investors such as pension funds and endowments have been doing for decades, we feel that portfolio construction should consider these strategies in the context of improving risk-adjusted returns.
We look at these as filling such roles in a portfolio as:
- Volatility dampeners
- Return diversifiers
- Return enhancers
The dispersion of returns in this space is much greater than traditional asset classes, underscoring the value of professional, unbiased advice that we offer as fiduciaries.
Biechele Royce Advisors will listen to your needs to determine the appropriate allocation to alternatives - and where to fund this from, based on what role they are best suited to play in your overall portfolio. A range of both private and public investments in such areas as hedged equity, debt, real estate and energy are examples of alternatives with varying levels of income generation, volatility, liquidity and correlations to traditional stock and bond markets.
A multitude of products and strategies exist to gain access to alternative investments with varying levels of risk and liquidity. These can be:
- Equity Alternatives
- Fixed Income Alternatives
- Multi-Asset Class diversifiers