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Jason Zweig believes alternative assets do not belong in 401(k)s.
"Whether we’re talking about a smaller firm like Redwood or the giants of alternative investing, the same rule applies: Assets that don’t trade every day aren’t low risk just because they don’t trade every day. And, until costs come down and conflicts of interest are ironed out, stuffing private assets inside a fund that does trade every day is a rotten idea for retirement savers."
Jason Zweig believes alternative assets do not belong in 401(k)s.
"Whether we’re talking about a smaller firm like Redwood or the giants of alternative investing, the same rule applies: Assets that don’t trade every day aren’t low risk just because they don’t trade every day. And, until costs come down and conflicts of interest are ironed out, stuffing private assets inside a fund that does trade every day is a rotten idea for retirement savers."
Other than TIAA RE, which has proven itself over the years, I think Jason is spot-on correct, as I mentioned earlier. The average person is not in a position to research (or understand) the nuances and intracasies of illiquid investments ... heck, most people have no idea about things like 'fundamentals' or 'moats' or whatnot when it comes to just buying *stocks*.
Bloomberg news ran an article yesterday ( which of course I can't find now) pointing out the fact that this push for PE in Retirement funds comes just as PE returns have crashed, it has become enormously "popular" with consequent lower returns as many PE funds don't know what they are doing, and many University endowments are selling PE because either they need liquidity or it has not preformed
Jeffrey Ptak from M* discovered that the Redwood Private Real Estate Debt interval fund recorded a loss on just three days since its June 2023 inception. This fund gained 7.2% a year from 07/01/2023 - 04/30/2025 with a standard deviation of just 0.5%! Only thirteen OEFs/ETFs had a higher Sharpe Ratio (4.0) over this time period. As it turns out, seven other interval funds (out of 79 total) delivered a higher Sharpe Ratio than the Redwood fund during the same period. Are some interval funds too good to be true? Caveat emptor!
Comments
"Whether we’re talking about a smaller firm like Redwood or the giants of alternative investing,
the same rule applies: Assets that don’t trade every day aren’t low risk just because they don’t trade every day.
And, until costs come down and conflicts of interest are ironed out, stuffing private assets inside a fund
that does trade every day is a rotten idea for retirement savers."
https://www.msn.com/en-us/money/savingandinvesting/this-new-investing-idea-isn-t-right-for-your-retirement-plan/ar-AA1EUSqV
Article - Possibly what you’re referencing
:
recorded a loss on just three days since its June 2023 inception.
This fund gained 7.2% a year from 07/01/2023 - 04/30/2025 with a standard deviation of just 0.5%!
Only thirteen OEFs/ETFs had a higher Sharpe Ratio (4.0) over this time period.
As it turns out, seven other interval funds (out of 79 total) delivered a higher Sharpe Ratio
than the Redwood fund during the same period.
Are some interval funds too good to be true?
Caveat emptor!
https://jeffreyptak.substack.com/p/what-new-sorcery-is-this