The actively managed PowerShares S&P 500 Downside Hedged Portfolio (NYSEArca: PHDG) tries to generate positive total returns in a rising or falling market. PHDG can act as an equity substitute to help provide uncorrelated returns to broad equity markets.
“While balanced growth can be pursued with a traditional 60/40 approach, it can be further enhanced with a multi-strategy alternatives allocation whose strategy supports volatility management,” Ted Samulowitz, V.P. and Portfolio Manager for Invesco PowerShares, said.
Jason Stoneberg, V.P. and Director of Research for Invesco PowerShares, points out that liquid alternative investments have experienced a compound aggregate growth rate of 28% over the past decade, accumulating $747 billion in assets in 2013 from $61 billion in 2003.
Meanwhile, the number of alternative ETFs, which track currencies, real estate, commodities, managed futures and long/short, among others, have increased from one in 2004 to 450 options in 2014.
The liquid alts space could continue to grow as more investors gain access to the space. Stoneberg points out that institutional investors have a little less than 25% allocated toward alternatives, whereas retail investors make up less than 5%. The main barrier to entry is the so-called Knowledge Gap, and more education will be needed to help investors make an informed decision as a recent poll of financial advisors showed.
Financial advisors who are interested in learning more about alternative investment strategies can listen to the webcast here on demand.