At AlphaCore Wealth Advisory, we believe incorporating liquid alternatives into the asset allocation mix can help investors build the well-diversified portfolios they need to shield their wealth against market downturns.
This approach paid off for like-minded liquid alts investors, as each of its categories posted a positive performance last quarter. However, there seems to be a disconnect in the space. Despite the sector’s positive performance, liquid alts funds saw a relatively flat quarter of flows.
Why is there such a disconnect? To learn more about the current state of the liquid alts space, as investors head into the final stretch of the year, FundFire turned to Johann Lee, CFA, director of research of AlphaCore Wealth Advisory, a firm that incorporates liquid alts into client portfolios for wealth-protecting diversification.
According to Lee, the past year has been “another proof statement” for the importance of allocating towards liquid alts in diversified portfolios.
While there is a significant performance dispersion across the space, Lee says there are managers who still deliver good returns to investors. For example, this year, multi-strategy and convertible arbitrage managers both performed well for AlphaCore’s clients.
“The [fund] count is falling, but there is still plenty of research to do,” Lee tells the publication. “There are still really good managers. You just have to look for them.”