Expanding the Investor Toolkit: A Modern Introduction to Alternatives

The 60/40 portfolio's limitations, exposed in 2022, are driving demand for alternatives. These strategies, once exclusive to institutions, are now accessible to more investors via new products.

This shift is crucial because public markets are increasingly concentrated. Alternatives can offer diversification and potentially better risk-adjusted returns by accessing private markets. Advisors must understand these vehicles to guide clients effectively.

We should watch for continued product innovation and the growth of advisor adoption, projected to reach $4.2 trillion in five years. Uncertainty remains regarding the suitability of specific alternative strategies for individual clients and the potential for conflicts of interest.