Alternative strategies have gotten second look from investors disappointed with the performance of stocks the past decade who want to diversify.
“The alternative ETF market hasn’t really taken off, and what you see with alternative ETFs that are popular are more alternative asset classes,” said Alec Papazian, associate director at Cerulli Associates, in the Ignites report.
Alternatives overall make up $39 billion of the $1.5 trillion U.S. ETF market, according to Morningstar, which places commodity products in a separate category.
“Some of these [alternative strategies]lend themselves better to active management and mutual funds,” which do not require portfolio transparency or large trading volumes to attract assets, Papazian said in the article.