The Specialty Investments Channel

Second Quarter Hedge-Fund Strategy Outlook: K2 Advisors

In their second-quarter (Q2) 2018 outlook, K2 Advisors’ Research and Portfolio Construction teams share their views on why investors should not fear the return of market volatility—and why it may unlock opportunities for active managers. We believe offering these insights will help investors better understand the rationale for owning retail mutual funds that invest in hedge strategies.

Do Equity Hedge Funds Really Generate Alpha?

Hedge funds, as represented by the Barclay index, can effectively be viewed as equity replacements. Further, the proper benchmark for equity hedge funds is target volatility strategies.

Capital Efficiency Trumps Fees in the Search for Portfolio Diversifiers

The evaluation of alternatives introduces an extra dimension into the equation that investors don’t need to think about with traditional equity funds. It’s the concept of capital efficiency.

The Risk Contribution of Stocks: Part 3

Part 3 of 3: Most investors tend to believe that stocks are a good—perhaps even the best—investment in the long run. However, the reason for expecting good performance from stocks is perhaps not always clearly articulated: Quite simply, it is because they are risky.

Weighing the Week Ahead: Have Stock Prices Veered from the Fundamentals?

The economic calendar has several of the most important reports. The managerial rosters will be back at full strength, perhaps after an extra day or two off. Investment committees will consider implications from Q1 results. Pundits will try to explain what it all means.

Investing During a Different Rate Cycle

Amid a rise in market volatility around the world, the fundamentals for Asia equities look fairly healthy. Investors should not ignore, however, the interconnectedness of today’s global markets.

The Beginning of the End?

The global expansion is either nearing its demand-driven peak or in the early stages of a supply-driven renaissance. We share our assessment and portfolio positioning.

Do Your Target-Date Funds Measure Up to Rising Rates?

Rising US interest rates could pose a challenge for target-date funds (TDFs) that concentrate on “core” US fixed-income exposure. Diversifying across a broad range of bond markets and strategies can create a cushion in a rising-rate environment.

Three Emerging Trends That Are Upending Our Profession

Last year, I made a number of bold predictions about how the advisory profession is evolving, and what firms are going to have to do to stay ahead of the curve. How have my predictions held up? Here are three transformations that will force every advisory firm to adapt.

Retirement Risk: Don't Trade Downside Protection for More Upside

Are Fidelity Investments’ target date funds too risky? We evaluate the short and long-term risks for a typical participant.

Why Convertible Arbitrage Is a True Market Neutral Strategy

Eli Pars explains that convertible arbitrage has performed well in most equity market environments—and that the strategy has done its best in declining equity markets historically. To learn more visit: http://bit.ly/AskPM_Alt

Trade Wars are Bad, and Nobody Wins

Inker, the head of GMO's asset allocation team, warns that a full-blown trade war "is probably more dangerous for investors at this time than at any other time in recent history."

With Target-Date Funds, History Does Repeat

Target-date funds played a big part in helping defined contribution (DC) plan participants stay invested through February’s market turmoil. And history does repeat: in the severe 2008–09 financial crisis, these funds kept many participants positioned to take part in a lengthy bull market.

Defined Contribution: Four Themes for 2018 and Beyond

In our view, the prospective low-return environment calls for a capital-efficient approach that pairs actively managed bonds with passive or enhanced equities in target-date, core and retirement-income allocations.

Yes, Rates and Stocks Can Rise Together…. for Now

Think rising interest rates and higher stock prices are like oil and water? Think again, says Russ, at least for the time being.