Alternative investments have become the Mona Lisa of portfolio allocation over the past 7 years: every allocator sees something different. While disguised as alternative investments, the reality is that the 7-year bull market has lulled managers into a false sense of security surrounding “alternative” funds that really correlate to the stock market. The uncertainty surrounding market valuation and global macro risks in both the stock and bond markets dictate the need to move from what was traditionally viewed as alternatives, towards what we now call “True Alternatives” in a portfolio. We define true alternatives as managers and strategies that can earn returns that are entirely uncorrelated to stocks, bonds, commodities and currencies.
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