Applying Alternatives: The new essential for traditional portfolios

Published: August 27, 2024
Author: Picton Mahoney Asset Management

Investor
Education

Looking back, the past 35 years have generally been a good ride for investors holding traditional portfolios of 60% global stocks and 40% bonds, known as the 60/40 portfolio. Historically, these two asset classes have been a lucrative combination providing enough diversification to weather volatility.

However, that diversification benefit has eroded in recent years due to economic factors, such as inflation, which seems to have caused stocks and bonds to behave similarly. As these two asset classes become increasingly correlated in today’s markets, a traditional portfolio’s diversification diminishes, potentially leaving you open to increased risk and reduced risk-adjusted returns.

In today’s market environment, you may be looking for strategies to increase diversification, mitigate risk or increase returns to help your portfolio thrive.

Alternative investments may be the solution you are looking for.

In this article, we’ll explore the What, Why and How of alternative investments…

Related Content

This material has been published by Picton Mahoney Asset Management (“PMAM”) on August 27, 2024

It is provided as a general source of information, is subject to change without notification and should not be construed as investment advice. This material should not be relied upon for any investment decision and is not a recommendation, solicitation or offering of any security in any jurisdiction. The information contained in this material has been obtained from sources believed reliable, however, the accuracy and/or completeness of the information is not guaranteed by PMAM, nor does PMAM assume any responsibility or liability whatsoever. All investments involve risk and may lose value. This information is not intended to provide financial, investment, tax, legal or accounting advice specific to any person, and should not be relied upon in that regard. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional.

This material may contain “forward-looking information” that is not purely historical in nature. These forward-looking statements are based upon the reasonable beliefs of PMAM as of the date they are made. PMAM assumes no duty, and does not undertake, to update any forward-looking statement. Forward-looking statements are not guarantees of future performance, are subject to numerous assumptions and involve inherent risks and uncertainties about general economic factors which change over time. There is no guarantee that any forward-looking statements will come to pass. We caution you not to place undue reliance on these statements, as a number of important factors could cause actual events or results to differ materially from those expressed or implied in any forward-looking statement made.

Commissions, trailing commissions, management fees, performance fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Alternative mutual funds can only be purchased through a registered dealer and are available only in those jurisdictions where they may be lawfully offered for sale.

There is no guarantee that a hedging strategy will be effective or achieve its intended effect. The use of derivatives or short selling carries several risks which may restrict a strategy in realizing its profits, limiting its losses, or, which cause a strategy to realize or magnify losses. There may additional costs and expenses associated with the use of derivatives and short selling in a hedging strategy.

This material is confidential and is intended for use by accredited investors or permitted clients in Canada only. Any review, re-transmission, dissemination or other use of this information by persons or entities other than the intended recipient is prohibited.

© 2024 Picton Mahoney Asset Management. All rights reserved.