New Ball, New Game: The Role Of Liquid Alternatives In Balanced Portfolios

A ‘new game’ for investors due to the regime change from ultra-low interest rates to a higher-for-longer scenario and, possibly, a central bank target greater than the historical two per cent; growing geopolitical tensions, including between China and the West, and the economic effects of on-shoring manufacturing; and rising risk of business earnings compression has investors turning to liquid alternative strategies, says Felix Narhi, CIO and portfolio manager at PenderFund. In the article ‘New Ball, New Game: The Role Of Liquid Alternatives In Balanced Portfolios’ at the Private Wealth Canada website, he says these investments aim to provide diversification, non-correlated returns, and less volatility than the overall market. However, they come with certain limits on the amount of leverage and shorting they can offer.