A New Take on Portfolio Diversification

By Yazann Romahi  via Iris.xyz

With investment returns around the world declining, investors have increasingly been looking beyond traditional asset classes to diversify their existing portfolios and to potentially pick up incremental returns. That’s where the potential of alternatives comes in. Once only available to institutional investors, alternative strategies are becoming more mainstream and accessible to individual investors through more cost efficient and liquid vehicles, such as mutual funds and exchange-traded funds.

A new take on diversification

Alternative strategies are a very important source of diversification in investor portfolios. A typical balanced investor can look at investments such as alternatives in two different ways:

  • First, as a return-enhancing diversifier where traditional diversifiers may no longer be effective.

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