Collectibles often satisfy an emotional need, but they also may offer benefits similar to those of financial assets. Noting the ability of collections to deliver superior investment returns while helping to diversify a portfolio, Robert W. Baird & Company makes the case for treating private collections like other assets.
If the market continues to transition to a more fundamentals-driven recovery, investment managers – including Shariah managers - with a track record of strong security selection capabilities may be in a better position than other managers to navigate such an environment, according to SEI Investments. Managers who follow strong due diligence process...
President's Letter: February 2010 Bernardi Securities I am convinced more than ever that the "perfect" bond market hedge does not exist. Many, many investors lost money over the last 18 months on "hedged" bond investments and swaps. Some would have seen their "hedged" investments wiped out entirely had not the government rescued certain financial...
BNY Mellon chronicles the rapid evolution of exchange-traded funds.
Master Limited Partnerships (MLPs) are publicly listed limited partnerships that trade much like the shares of a public corporation. MLPs are flow through entities whose income stream is taxed in the hands of its unitholders and as such, are not subject to state or federal income tax at the partnership level. The case for MLP ownership is compellin...
This paper from AQR Capital Management helps demystify managed futures, one of the few investments that performed well in 2008. The authors describe how to construct a simple version of this strategy, illustrate how this simple version performs in various market environments, and show how managed futures can be used to enhance the risk-return profi...
This article implores investors to draw conclusions about an investment manager not on the basis of numbers - past performance - but rather all the factors you can explore without looking at their track record. Once you have formed your opinion, see whether it tallies with the manager's track record.
Asset Diversification
This article argues that real estate has become an integral component of diversified investment portfolios, and that exposure can be obtained via private equity structures. Institutionally sponsored, these funds can expose the investor to core, core-plus, value-added, opportunistic, joint-venture, private placement and retail syndication invest...
Hotels can be lucrative investments, but they also can be disastrous investments. As an operating business with high capital costs and many employees, hotels have unique obligations and liabilities that potential investors must assess carefully. In this paper, HVS Hotel Management lays out the key issues for investors to consider as part of the due...
Inside every long-term investor is a short- and medium-term investor who recognizes the need for short-term liquidity and whose total portfolio consists of varied sub-portfolios. BNY Mellon explores the concept of multi-horizon investing in detail, focusing on the concept of sub-portfolios with different objectives, expected returns and liquidity c...
For individuals who believe private equity offers compelling portfolio diversification and historical outperformance of the public equity markets the key is to find a way to control the J-Curve to reduce its depth yet retain the upside. One solution is mezzanine funds, says TAC Group.
Treasury Inflation Protected Securities, or TIPS, offer additional portfolio diversification, provide a hedge against inflation and help preserve capital, according to this paper from State Street Global Advisors. The authors explain the benefits of TIPS indexing, looking at manager returns over a three-year period.
Early-stage direct deals involving start-up businesses, real estate developments or similar high-risk, high-return opportunities should be evaluated very closely on the merits as well as the risks. Each opportunity is different and all require unique in-depth due diligence, but there are some general questions that should always be asked, the autho...
Tail risk can be reduced by enhancing a portfolio's overall risk-return characteristics. Often this approach will blend several distinct strategies: broader diversification, volatility-based risk management, and drawdown control, perhaps combined with active management strategies such as managed futures or low-beta equities.