Lastly, the global macro based strategy tries to exploit macro economic imbalances across the globe. The strategy may be implemented through a number of asset classes, including stocks, bonds, currencies and commodities.
JPHF includes 59.5% long and -36.4% short exposure to equity long/short; 38.4% long and -13.4% short exposure to the event driven theme; and 66.9% long and -46.2% short exposure to macro based strategies.
The managing advisors of JPHF will try to generate positive total returns over time while including a relatively low correlation to traditional markets, which helps smooth out a portfolio if the markets experience any unexpected turns ahead.
Liquid alternative funds, like JPHF, provide a much cheaper way to access the same kind of hedge fund-esque exposure. In contrast, a hedge fund may include a normal management fee of 1% to 2% on top of a performance fees of as much as 20% of annual gains.
Potential investors should be aware that these types of investments are not meant as growth strategies to generate outsized returns in investment portfolios. In reality, these strategies are doing exactly what they were made for, diminishing volatility. Consequently, in bullish market conditions, the strategies may underperform, but if the markets sour, alts can shine.
Financial advisors who are interested in learning more about alternative investments can register for the Thursday, June 22 webcast here.