Institutions Keep Faith with Alternatives
Institutional investors retain an appetite for alternative investments, according to a new study produced by State Street’s independent think tank the Center for Applied Research (CAR) in partnership with the Fletcher School of Law and Diplomacy at Tufts University.
Using empirical analysis, supplemented by manager interviews and survey reviews, the By the Numbers: The Quest for Performance study looked at the investment patterns of institutional investors across an extensive asset profile diversified by geography and a broad use of alternative assets and strategies.
Three mock portfolios were created – a US 60/40 portfolio consisting of the S&P 500 index and an index of 10-year US corporate bonds; a globally diversified portfolio consisting of a 60/40 mix, equally weighted among world, emerging and frontier equities and 20-year treasury and 10-year US corporate fixed income; and a 40-20-40 broadly diversified portfolio of equally weighted positions of the S&P and emerging indexes, 10-year US corporate bonds and proxies for hedge fund and private equity strategies.
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