Consider alternative opportunities across markets, asset classes and economies
Market volatility is likely to continue in 2023, with central banks continuing to raise rates to curb inflation and markets shifting to reprice leaving investors grappling with continued uncertainty. The ability to seek asset returns remain high as investors look further afield, both geographically and beyond public markets. The diverse nature of alternatives provide opportunities to seek uncorrelated returns, broaden out the investment portfolio and uncover hidden gems across the alternatives universe.
The diverse nature of alternatives provide a robust investor toolkit. Some examples include liquid alternatives, hedge funds, private credit, private equity and real assets such as unlisted infrastructure, particularly renewable energy as economies transition to a low-carbon world.
Actively take an alternative perspective and seek out dynamic opportunities that can provide diversification and potentially deliver excess returns in changing markets.
Upsides to alternatives
Alternative investments don't correlate to the stock market and behave differently when compared to traditional assets, with a different risk/return profile therefore providing portfolio diversification and the potential for higher returns.
Portfolio Diversification
Alternatives are not correlated to traditional assets and can help in diversifying an investor's portfolio
Higher Returns
Alternatives help provide enhanced returns as it provides a diverse investment range and strategies, improving the overall risk of investment
We group alternatives according to three main portfolio functions -
alpha, income and diversification.
Alpha
Because Alternatives can behave differently to traditional assets, they can act as potential alpha generators in an overall portfolio. A thoughtful mix between private and public assets can deliver different outcomes and may help improve portfolio risk/return profile.
Adding alternative assets may provide opportunities to improve returns or lower volatility by allocating from bonds and stocks.
Income
As some alternatives are not as sensitive to the economy as others, they can provide relatively attractive yield opportunities while capturing relatively less market risk in the current environment.
For example, while many investors seek more income in global high-yield bonds, such bonds have a higher correlation to equity markets and represent a higher risk, when compared with government bonds.
Diversification
Generally, alternative investments have a low correlation to traditional assets such as equities and bonds and can help offer diversification benefits to an overall portfolio. Increasingly, investors are looking to invest in strategies built to deliver uncorrelated returns to traditional asset classes.
Even within Alternatives, one asset can behave differently from another, providing additional diversification.
Our Alternatives Capabilities
330+
Investment Professionals
US$188 b
Assets under management
(AUM)
15
Investment Offices
Worldwide
Our solutions
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For more information, please call or email us. You can also contact your J.P. Morgan representative.
1800 576 100 (Application enquiries)