Alts Democratized, + Website - A Practical Guide to Alternative Mutual Funds Etfs for Financial

A Comprehensive Review of the Liquid Alts Market and How '40 Act Products Can Enhance Client PortfoliosLiquid alternatives give investors access to hedge fund strategies with the benefits of '40 Act products: lower fees, higher liquidity, greater transparency, and improved tax efficiency.Alts Democratized is a hands-on guide that offers financial advisors and individual investors the tools and analysis to enhance client portfolios using alternative mutual funds and ETFs. Well-grounded in research and replete with more than 100 exhibits of Lipper data, Alts Democratized profiles the top ten funds in each of the eleven Lipper liquid alt classifications. This includes total net assets, fund flows, risk and return metrics, and the factor exposures that drive performance and help explain correlations to various forms of beta. Jessica Lynn Rabe and Robert J. Martorana, CFA, combine this research with a comprehensive framework for fund selection and portfolio construction to enhance the asset allocation process, facilitate portfolio customization, and manage client expectations.In addition, the book includes functional perspectives on issues pertinent to financial advisors such as fees, client suitability, and volatility management. This helps advisors apply the concepts to portfolios and offer actionable investment advice. The authors also interviewed executives at leading wealth management firms to provide color on industry trends and best practices.The companion website provides ancillary materials that reinforce and supplement the book, including:* The authors' top ten takeaways* Classification cheat sheet* Portfolio construction guide (full color)* Talking points for clients* Q&A on liquid alts* Presentation with all 118 exhibits from the book (full color)Alts Democratized comprises a complete resource for the advisor seeking new sources of alpha, diversification, and hedging of tail risks.

List of contents

Foreword xiiiRobert Jenkins, Global Head of Research at Thomson Reuters LipperAcknowledgments xviiIntroduction xixCHAPTER 1 Definitions and Methodology 1Definitions 1Lipper Classifications 2The Future 2Methodology 3Guide to Chapters 3 through 13 5Summary 8CHAPTER 2 Road Map for the Liquid Alts Space 9Liquid Alts in Context 9Assets and Net Flows 13IPOs and Liquidations 13Risk and Return 18Summary 20Questions 20CHAPTER 3 Absolute Return Funds 21Definition 21Total Net Assets and Net Flows 22Risk and Return 23Factor Exposures 24Asset Allocation and Fund Selection 25Top Ten Funds 26Blockbuster and Spotlight 29Summary 33Problems 33References 34CHAPTER 4 Alternative Active Extension Funds 35Definition 35Total Net Assets and Net Flows 36Risk and Return 37Factor Exposures 38Asset Allocation and Fund Selection 40Top Ten Funds 41Blockbuster and Spotlight 44Summary 47Problems 47CHAPTER 5 Alternative Credit Focus Funds 49Definition 49Total Net Assets and Net Flows 50Risk and Return 51Factor Exposures 52Asset Allocation and Fund Selection 54Top Ten Funds 55Blockbuster and Spotlight 60Summary 63Problems 63References 63CHAPTER 6 Alternative Currency Strategies Funds 65Definition 65Total Net Assets and Net Flows 66Risk and Return 67Factor Exposures 68Asset Allocation and Fund Selection 69Top Ten Funds 70Blockbuster and Spotlight 76Summary 77Problems 77Reference 77CHAPTER 7 Alternative Equity Market Neutral Funds 79Definition 79Total Net Assets and Net Flows 80Risk and Return 80Factor Exposures 82Asset Allocation and Fund Selection 84Top Ten Funds 84Blockbuster and Spotlight 88Summary 91Problems 92CHAPTER 8 Alternative Event-Driven Funds 93Definition 93Total Net Assets and Net Flows 94Risk and Return 95Factor Exposures 96Asset Allocation and Fund Selection 98Top Ten Funds 99Blockbuster and Spotlight 104Summary 106Problems 106CHAPTER 9 Alternative Global Macro Funds 107Definition 107Total Net Assets and Net Flows 108Risk and Return 110Factor Exposures 111Asset Allocation and Fund Selection 112Top Ten Funds 113Blockbuster and Spotlight 115Summary 119Problems 120CHAPTER 10 Alternative Long/Short Equity Funds 121Definition 121Total Net Assets and Net Flows 122Risk and Return 123Factor Exposures 124Asset Allocation and Fund Selection 126Top Ten Funds 127Blockbuster and Spotlight 131Summary 134Problems 135CHAPTER 11 Alternative Managed Futures Funds 137Definition 137Total Net Assets and Net Flows 138Risk and Return 139Factor Exposures 140Asset Allocation and Fund Selection 141Top Ten Funds 141Blockbuster and Spotlight 143Summary 148Problems 148CHAPTER 12 Alternative Multi-Strategy Funds 149Definition 149Total Net Assets and Net Flows 150Risk and Return 150Factor Exposures 152Asset Allocation and Fund Selection 152Top Ten Funds 153Blockbuster and Spotlight 156Summary 160Problems 160CHAPTER 13 Dedicated Short Bias Funds 161Definition 161Total Net Assets and Net Flows 162Risk and Return 163Factor Exposures 164Asset Allocation and Fund Selection 164Top Ten Funds 165Blockbuster and Spotlight 170Summary 172Problems 172CHAPTER 14 Lipper Alternative Classifications Summary 173Lipper Alternative Classification Roles 173Absolute Return Funds 174Alternative Active Extension Funds 175Alternative Credit Focus Funds 175Alternative Currency Strategies Funds 176Alternative Equity Market Neutral Funds 177Alternative Event Driven Funds 177Alternative Global Macro Funds 178Alternative Long/Short Equity Funds 178Alternative Managed Futures Funds 178Alternative Multi-Strategy Funds 179Dedicated Short Bias Funds 179CHAPTER 15 Portfolio Construction 181Holistic and Goals-Based 181Macro Environment 182Correlations Converge 183Evolution of Investment Management after the Crash 183Core/Satellite Investing 187Micro-Endowment Model 188Summary 190Questions 191CHAPTER 16 Volatility Management 193How Volatility Drag Reduces Compound Returns 194Talking Points for Clients 199Behavioral Discipline 199Summary 200CHAPTER 17 Suitability and Fees 201Suitability and Results 201Interviews 202Fees 206Summary 207Questions 207CHAPTER 18 Fund Selection 209Five Key Roles 210General Tips about Fund Selection 216Summary 217CHAPTER 19 Interviews 219Stephen Horan 219Roger Paradiso 224Daryl Dewbrey 228Daniel Egan 233Conclusion 237About the Companion Website 239About the Authors 241Index 243

About the author

JESSICA LYNN RABE is a Research Associate at ConvergEx Group, a global brokerage company based in New York. Rabe assists the firm's Chief Market Strategist in publishing the ConvergEx MorningBriefing, a daily commentary on financial markets. Rabe has also published articles and contract research on the liquid alts industry.

ROBERT J. MARTORANA, CFA, owns Right Blend Investing, LLC, a Registered Investment Advisory firm based in New Jersey. Martorana manages client portfolios, analyzes alternative products, and is a consultant to the mutual fund industry.

Summary

A Comprehensive Review of the Liquid Alts Market and How '40 Act Products Can Enhance Client Portfolios

Liquid alternatives give investors access to hedge fund strategies with the benefits of '40 Act products: lower fees, higher liquidity, greater transparency, and improved tax efficiency.

Alts Democratized is a hands-on guide that offers financial advisors and individual investors the tools and analysis to enhance client portfolios using alternative mutual funds and ETFs. Well-grounded in research and replete with more than 100 exhibits of Lipper data, Alts Democratized profiles the top ten funds in each of the eleven Lipper liquid alt classifications. This includes total net assets, fund flows, risk and return metrics, and the factor exposures that drive performance and help explain correlations to various forms of beta. Jessica Lynn Rabe and Robert J. Martorana, CFA, combine this research with a comprehensive framework for fund selection and portfolio construction to enhance the asset allocation process, facilitate portfolio customization, and manage client expectations.

In addition, the book includes functional perspectives on issues pertinent to financial advisors such as fees, client suitability, and volatility management. This helps advisors apply the concepts to portfolios and offer actionable investment advice. The authors also interviewed executives at leading wealth management firms to provide color on industry trends and best practices.

The companion website provides ancillary materials that reinforce and supplement the book, including:
* The authors' top ten takeaways
* Classification cheat sheet
* Portfolio construction guide (full color)
* Talking points for clients
* Q&A on liquid alts
* Presentation with all 118 exhibits from the book (full color)

Alts Democratized comprises a complete resource for the advisor seeking new sources of alpha, diversification, and hedging of tail risks.

Product details

• Authors: Robert J Martorana, Robert J. Martorana, Martorana Robert J., Robert J. Martorna, Jessica Lynn Rabe, Jessica Lynn Martorana Rabe, Jessica Lynn Martorna Rabe, Jl Rabe, Rabe Jessica Lynn
• Publisher: Wiley, John and Sons Ltd
• Languages: English
• Product format: Hardback
• Released: 20.02.2015
• EAN: 9781118971017
• ISBN: 978-1-118-97101-7
• No. of pages: 272
• Series: Wiley Finance; Wiley Finance Editions; The Wiley Finance Series; Wiley Finance; Wiley Finance Editions
• Subjects: Social sciences, law, business > Business > Individual industrial sectors, branches; Kapitalanlage, Finanzwesen, investmentfonds, Allg. Finanz- u. Anlagewesen, Finance & Investments, Finanz- u. Anlagewesen