While the industry is expanding, assets remain concentrated among a couple of players. For instance, the Windhaven Investment Management, which was acquired by Charles Schwab, includes three strategies with $12.5 billion in assets under management.
Nevertheless, other strategies are making inroads into the space. F-Squared investments have witnessed material asset growth, as well as Quantitative Advantage and Cougar Global Investment’s MAR strategies.
As with all investments, investors should take the time to do some due diligence. Gogerty suggests people should determin the starting universe of asset classes and potential allocation swings. Additionally, investors should ask about set allocation bands and how large a strategy’s tactical cash holding can grow to. Lastly, look for non-typical asset classes, such as uncommon commodities, volatility strategies or leveraged products.
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Max Chen contributed to this article.