New York (HedgeCo.net) – Highlights of a second annual national survey released by Morningstar and Barron\u2019s Magazine examining the perception and usage of alternative investments among institutions and financial advisors showed that hedge funds were the most popular alternative vehicles over the last five years, and institutions and advisors expect to continue to increase allocations to hedge funds over the next five years.<\/p>\n
\u201cOne of the most interesting findings from our survey is that both institutions and advisors continue to view alternative investments optimistically, despite their questionable performance, correlation, and liquidity during last year\u2019s global downturn as well as the high-profile scandals that rocked the hedge fund industry,\u201d said Steve Deutsch, director of the pension, endowment, and foundation database at Morningstar. \u201cAgain this year, the majority of participants indicate that they plan to increase allocations to alternatives, but with greater scrutiny and due diligence given to those investments.\u201d<\/p>\n
Among the survey findings:<\/p>\n
Current and Future Usage of Alternatives
\n\u2022 More than 60% of institutions and advisors believe that alternatives will be as important or more important than traditional investments over the next five years.
\n\u2022 The majority of institutions and advisors expect alternatives to account for more 10% of their portfolios over the next five years; a quarter of institutions expect alternatives to account for more than 25% of their portfolios.
\n\u2022 Hedge funds were the most popular alternative vehicles over the last five years, and institutions and advisors expect to continue to increase allocations to hedge funds over the next five years.<\/p>\n
Motivation and Hesitation
\n\u2022 For both institutions and advisors, the top three reasons for investing in alternatives remain the same as in last year\u2019s survey: portfolio diversification, absolute returns, and exposure to different investment techniques, like arbitrage or shorting.
\n\u2022 Institutions and advisors are much more concerned, however, about lack of liquidity and transparency than they were last year.<\/p>\n
Definitions of \u201calternative\u201d
\n\u2022 Compared to the 2008 survey, fewer institutions and advisors view real estate investment trusts and commodities as alternative asset classes.
\n\u2022 Both institutions and advisors tend to classify investments as \u201calternative\u201d based on the investment\u2019s strategy, i.e. absolute return, rather than the investment\u2019s designation, i.e. mutual fund versus hedge fund.<\/p>\n
\u201cPerhaps most important for investment consultants, advisors, and money management firms to note is the survey once again found that overall both institutions and advisors want the benefits of alternative strategies with the positive characteristics of traditional investments\u2014low correlation with liquidity, absolute returns with transparency, and redemptions without restrictions,\u201d Deutsch added.<\/p>\n
Morningstar and Barron\u2019s conducted the Web-based survey in late September through early October 2009; 89 institutions and 300 financial advisors participated. Survey results appear in the Nov. 9 issue of Barron\u2019s and online at Barrons.com.<\/a><\/p>\n Editing by Alex Akesson New York (HedgeCo.net) – Highlights of a second annual national survey released by Morningstar and Barron\u2019s Magazine examining the perception and usage of alternative investments among institutions and financial advisors showed that hedge funds were the most popular alternative vehicles […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[919,3],"tags":[136,4642,5184,11148],"class_list":["post-13003","post","type-post","status-publish","format-standard","hentry","category-hedge-fund-research","category-hedgeco-news","tag-allocations","tag-alternative-investments","tag-due-diligence","tag-hedge-fund"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/13003","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=13003"}],"version-history":[{"count":4,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/13003\/revisions"}],"predecessor-version":[{"id":13018,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/13003\/revisions\/13018"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=13003"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=13003"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=13003"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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