In the wake of the recent market volatility, liquid alternative fund managers say their products showed their value, specifically in comparison to equity markets. Firms are now seeking to capitalize by drawing further attention to this in order to attract inflows into their liquid alt products. Although the period of instability was short, the fact that the offerings weathered it as most expected presents a strong opportunity to boost interest from investors. From Aug. 10 to 25, data from Morningstar shows that while the S&P 500 lost 9.99%, even the worst-performing liquid alt category - long/short equity funds - declined by only 5.02%. Meanwhile, bear market funds were the best-performing alternative category with an increase of 15.73%. In addition to touting their performance during such volatility, managers are also using the opportunity to increase awareness among investors about the use of liquid alts to limit exposure within their portfolio in order to hedge against losses during instability and over the long term.
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Liquid alts protected portfolios during August selloff - DailyAlts
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