- Are allocators using alternatives to defend or to attack? “In the highest risk portfolios on offer, these shrink further to 2.05 per cent for alts, which becomes 4.15 per cent when you add in property and infrastructure and then 4.25 when you add in commodities. This shows that pure alternatives are firmly the diversifier away from the fear of equity/bond correlation and not, it would seem, a source of alpha in themselves.” (FT Adviser)
- Fast-Growing $2 Trillion Private Credit Market Warrants Closer Watch “Today, immediate financial stability risks from private credit appear to be limited. However, given that this ecosystem is opaque and highly interconnected, and if fast growth continues with limited oversight, existing vulnerabilities could become a systemic risk for the broader financial system.” (IMF)
- Which Alternatives Fit Into Your Portfolio? “As the Morningstar US Market Index rose 26% in 2023, the alternative strategies categories delivered returns ranging between positive 17.1% and negative 4.4%. Trailing three-year correlations varied between 0.99 and negative 0.36, with two categories above 0.76. Unsurprisingly, the category with the strongest link to stocks fared the best with respect to returns, while the category with the weakest link was the only one to post negative returns in 2023: The options-trading category returned 17.1%, and the systematic trend category lost 4.4%.” (Morningstar)
- BlackRock’s Bitcoin fund nears $18bn in assets despite investors’ ‘wavering’ appetite for ETFs “BlackRock’s spot Bitcoin exchange-traded fund has raked in almost $18 billion in assets since it launched on January 11. That puts the fund among the top 3% ETFs ever launched, Bloomberg Intelligence ETF analyst Eric Balchunas posted on X.” (DL News)
- Wall Street might have a long wait for the next crypto ETF “The US Securities and Exchange Commission technically has until late May to approve or deny applications to launch the first exchange traded funds that would hold ether, the second largest cryptocurrency. But for practical purposes, it is already almost out of time.” (FN London)
- OCIO AUM to Increase at Least 54% over Four Years: Report “The OCIO field will reach $3.93 trillion in assets under management by 2028, Chestnut predicted, based on a study of 98 ‘senior solutions industry participants,’ including various types of OCIOs, consultants, asset managers, search consultants and allocators.” (FundFire)
- Closing Public-Private Real Estate Cap Rate Spreads and REIT Outperformance “Of the eight periods of significant REIT underperformance relative to private real estate since 2000, only two coincided with U.S. recessions. Each of these REIT relative performance troughs had a nadir that was more negative than an established thrshold of -10%. The most recent trough in the third quarter of 2022 had a total return difference of -38.4%. This marked the most significant degree of REIT relative underperformance in the last 45 years.” (Nareit)
- Fed Policy Leaves Bond ETF Investors in Limbo “As the outlook for multiple interest rate cuts this year starts to look less likely with each passing inflation report, fixed income ETFs closely tied to Fed policy are taking their lumps. The largest domestic exchange traded bond funds are lumbering into the second quarter as if rate cuts were never on the table, despite the year kicking off with expectations for as many as three interest rate cuts by year end.” (ETF.com)
- Morgan Stanley Converts 2 Fixed Income Mutual Funds into Active ETFs “Morgan Stanley expanded its ETF lineup with the introduction of the Eaton Vance Total Return Bond ETF (EVTR) and the Eaton Vance Short Duration Municipal Income ETF (EVSM). The bank is joining many of its peers in converting fixed income mutual funds into active fixed income ETFs.” (FINSUM)
- Blackstone $10 Billion Deal Is Latest Bet Property Near Lows “Blackstone Inc. struck a roughly $10 billion deal for an apartment landlord in the latest sign that the real estate investor sees a ripe moment to pour money into the property market.” (Bloomberg)
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