Day 2 at SALT Confab: Risk and Portfolio Construction | ETF Trends

Walking out to the hall, I see a conspicuous dichotomy in visitors at the Bellagio in Las Vegas. We have the jostling tourists disporting themselves in the revelries, and we have the bustling suits trying to keep temptation at bay, for now. On the second day of the SkyBridge Alternatives Conference, attendees finally get to sink their teeth into the meat, with key panels on navigating risk and new portfolio construction methodologies.

As market correlations spiked last year, we are beginning to take notice of how macro-economic events are starting weight on the investment environment. Individual stock-picking strategies are being replaced with broad-market overviews.

Eric Sprott, chief investment officer & senior portfolio manager at Sprott Asset Management, has been bullish on precious metals as an alternative investment strategy. On an interview with CNBC, Sprott acknowledged that silver is “the investment of the next decade” and also predicted that the gold metal could hit over $2,000 before the year is out. Meanwhile, gold dipped below $1,600 an ounce Wednesday. [Gold ETFs in Three-Day Tailspin as $1,600 Breached]

Additionally, we listened to the growing trend in portfolio construction, particularly as more funds included other funds within their strategies. This is nothing surprising, especially considering many hedge funds are including ETFs within their portfolios. [More Hedge Funds Tap ETFs]

“ETFs are playing a huge part in the growing Alts world,” Terry Digan, Director, Institutional Sales Select Sector SPDRs, said at the conference. “75% of our business comes from hedge funds and institutions.”

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.