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Alts Democratized: A Practical Guide to Alternative Mutual Funds and ETFs for Financial Advisors, + Website

Book Description

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.

    Note: The ebook version does not provide access to the companion files.

    Table of Contents

    1. Title Page
    2. Copyright
    3. Dedication
    4. Foreword
    5. Acknowledgments
    6. Introduction
    7. Chapter 1: Definitions and Methodology
      1. Definitions
      2. Lipper Classifications
      3. The Future
      4. Methodology
      5. Guide to Chapters 3 through 13
      6. Summary
    8. Chapter 2: Road Map for the Liquid Alts Space
      1. Liquid Alts in Context
      2. Assets and Net Flows
      3. IPOs and Liquidations
      4. Risk and Return
      5. Summary
      6. Questions
    9. Chapter 3: Absolute Return Funds
      1. Definition
      2. Total Net Assets and Net Flows
      3. Risk and Return
      4. Factor Exposures
      5. Asset Allocation and Fund Selection
      6. Top Ten Funds
      7. Blockbuster and Spotlight
      8. Summary
      9. Problems
      10. References
    10. Chapter 4: Alternative Active Extension Funds
      1. Definition
      2. Total Net Assets and Net Flows
      3. Risk and Return
      4. Factor Exposures
      5. Asset Allocation and Fund Selection
      6. Top Ten Funds
      7. Blockbuster and Spotlight
      8. Summary
      9. Problems
    11. Chapter 5: Alternative Credit Focus Funds
      1. Definition
      2. Total Net Assets and Net Flows
      3. Risk and Return
      4. Factor Exposures
      5. Asset Allocation and Fund Selection
      6. Top Ten Funds
      7. Blockbuster and Spotlight
      8. Summary
      9. Problems
      10. References
    12. Chapter 6: Alternative Currency Strategies Funds
      1. Definition
      2. Total Net Assets and Net Flows
      3. Risk and Return
      4. Factor Exposures
      5. Asset Allocation and Fund Selection
      6. Top Ten Funds
      7. Blockbuster and Spotlight
      8. Summary
      9. Problems
      10. Reference
    13. Chapter 7: Alternative Equity Market Neutral Funds
      1. Definition
      2. Total Net Assets and Net Flows
      3. Risk and Return
      4. Factor Exposures
      5. Asset Allocation and Fund Selection
      6. Top Ten Funds
      7. Blockbuster and Spotlight
      8. Summary
      9. Problems
    14. Chapter 8: Alternative Event-Driven Funds
      1. Definition
      2. Total Net Assets and Net Flows
      3. Risk and Return
      4. Factor Exposures
      5. Asset Allocation and Fund Selection
      6. Top Ten Funds
      7. Blockbuster and Spotlight
      8. Summary
      9. Problems
    15. Chapter 9: Alternative Global Macro Funds
      1. Definition
      2. Total Net Assets and Net Flows
      3. Risk and Return
      4. Factor Exposures
      5. Asset Allocation and Fund Selection
      6. Top Ten Funds
      7. Blockbuster and Spotlight
      8. Summary
      9. Problems
    16. Chapter 10: Alternative Long/Short Equity Funds
      1. Definition
      2. Total Net Assets and Net Flows
      3. Risk and Return
      4. Factor Exposures
      5. Asset Allocation and Fund Selection
      6. Top Ten Funds
      7. Blockbuster and Spotlight
      8. Summary
      9. Problems
    17. Chapter 11: Alternative Managed Futures Funds
      1. Definition
      2. Total Net Assets and Net Flows
      3. Risk and Return
      4. Factor Exposures
      5. Asset Allocation and Fund Selection
      6. Top Ten Funds
      7. Blockbuster and Spotlight
      8. Summary
      9. Problems
    18. Chapter 12: Alternative Multi-Strategy Funds
      1. Definition
      2. Total Net Assets and Net Flows
      3. Risk and Return
      4. Factor Exposures
      5. Asset Allocation and Fund Selection
      6. Top Ten Funds
      7. Blockbuster and Spotlight
      8. Summary
      9. Problems
    19. Chapter 13: Dedicated Short Bias Funds
      1. Definition
      2. Total Net Assets and Net Flows
      3. Risk and Return
      4. Factor Exposures
      5. Asset Allocation and Fund Selection
      6. Top Ten Funds
      7. Blockbuster and Spotlight
      8. Summary
      9. Problems
    20. Chapter 14: Lipper Alternative Classifications Summary
      1. Lipper Alternative Classification Roles
      2. Absolute Return Funds
      3. Alternative Active Extension Funds
      4. Alternative Credit Focus Funds
      5. Alternative Currency Strategies Funds
      6. Alternative Equity Market Neutral Funds
      7. Alternative Event Driven Funds
      8. Alternative Global Macro Funds
      9. Alternative Long/Short Equity Funds
      10. Alternative Managed Futures Funds
      11. Alternative Multi-Strategy Funds
      12. Dedicated Short Bias Funds
    21. Chapter 15: Portfolio Construction
      1. Holistic and Goals-Based
      2. Macro Environment
      3. Correlations Converge
      4. Evolution of Investment Management after the Crash
      5. Core/Satellite Investing
      6. Micro-Endowment Model
      7. Summary
      8. Questions
    22. Chapter 16: Volatility Management
      1. How Volatility Drag Reduces Compound Returns
      2. Talking Points for Clients
      3. Behavioral Discipline
      4. Summary
    23. Chapter 17: Suitability and Fees
      1. Suitability and Results
      2. Interviews
      3. Fees
      4. Summary
      5. Questions
    24. Chapter 18: Fund Selection
      1. Five Key Roles
      2. General Tips about Fund Selection
      3. Summary
    25. Chapter 19: Interviews
      1. Stephen Horan
      2. Roger Paradiso
      3. Daryl Dewbrey
      4. Daniel Egan
    26. Conclusion
    27. About the Companion Website
    28. About the Authors
    29. Index
    30. End User License Agreement