Stocks, bonds and cash have long been the chosen trinity of portfolio construction, but over the last decade, a fourth allocation — alternatives — has taken hold. Firmly, in fact. Alternatives promise greater diversification and a more dynamic asset mix to weather volatile times. And, for their part, investors — large and small — are piling in.
Alternative assets under management reached US$8.8-trillion globally last year and are expected to hit US$14-trillion by 2023, according to Preqin, an alternatives research firm.
Alternatives are undergoing continual changes going into 2020 — especially with an increased emphasis on ESG. It now permeates all alternatives — and that needs to be completely understood.