Time to Look Under the Hood of Your Alternatives

By Toroso Asset Management

In last week’s TETF index update, we discussed the Dow Jones Industrial Average (DOW) hitting all-time highs and FAANG (Facebook, Amazon Apple, Netflix, and Alphabet – formerly Google) stocks continuing to soar. What a difference one week makes! We are halfway into October and volatility has returned.

In a time like this, we like to step back and assess the landscape of the tools we have available as portfolio allocators. This week, we’ll focus on the alternative space as both stocks and bonds took a hit in last week’s volatility spike.

Before we do, let’s revisit broad performance of the asset classes covered last week to show how much has truly changed in a short period of time!

Equities were down across the board in correlation with treasuries. The five FAANG stocks have lost 10.53% last week alone. For the purpose of this exercise, we excluded commodity, VIX, leveraged, allocation, and tactical  funds; in other words we analyzed those investments built on a more structural diversification approach.