Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Not sure that I agree with the premise of the article. While I personally have no interest in commodities, real estate has certainly shown to be a good counterweight in my portfolio and fits nicely within the income sleeve in the IRA.
Saying all of these have been disasters is simply wrong. The biggest problems have come with liquid alts that allow the managers to essentially go anywhere, do anything. From our experience, those equity long-short funds that make large macro bets have been the worst. They are either doing extremely well or they are sucking air, mostly the latter of recent.
Other liquid alts have done about as we might have expected them to do. As with all fund categories, some are much better at executing their strategy than others. We have learned that it is very important for investors to know what the fund's strategy is, in what circumstances they ought to do well and where they might struggle, what limitations they have in terms of how they run the strategy, and how the strategy fits in with the investor's portfolio.
The numbers in the article are averages for each category, so the premise is unfair from the beginning. We could use the same thing for pretty much any asset class and run an article saying "(fill in the blank) investments have been a disaster." There are some Market Neutral, some Option Writing, some Multi-Alternative, some managed futures, some hedged equity, some precious metals, some commodities funds that have done pretty much what we would have expected. Most have not, but is that not the case for all fund categories? But then, MarketWatch has become more sensationalized in its headlines in recent years, and most of its writers tend to be that way, too.
Comments
Other liquid alts have done about as we might have expected them to do. As with all fund categories, some are much better at executing their strategy than others. We have learned that it is very important for investors to know what the fund's strategy is, in what circumstances they ought to do well and where they might struggle, what limitations they have in terms of how they run the strategy, and how the strategy fits in with the investor's portfolio.
The numbers in the article are averages for each category, so the premise is unfair from the beginning. We could use the same thing for pretty much any asset class and run an article saying "(fill in the blank) investments have been a disaster." There are some Market Neutral, some Option Writing, some Multi-Alternative, some managed futures, some hedged equity, some precious metals, some commodities funds that have done pretty much what we would have expected. Most have not, but is that not the case for all fund categories? But then, MarketWatch has become more sensationalized in its headlines in recent years, and most of its writers tend to be that way, too.