Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 
 
Blog Home
 

  Alternatives Update 3rd Quarter 2016
Posted Under: Alternatives

In the third quarter, Alternative Investments ("Alternatives") were a mixed bag with regards to performance. Six of eleven categories had positive returns with the remaining five posting negative returns. The strongest performing categories were primarily focused in the credit markets and the higher equity beta related strategies (hedged equity, event driven). Tangible assets (commodities and real estate) along with short bias equity funds ended sharply in the red, a strong reversal from the 2nd quarter performance. The Managed Futures category continued its malaise as rates remained very low and sustained trends absent. Short bias strategies, which had been one of the top performers earlier in the year, suffered as equity markets rallied, volatility fell and the U.S. markets shrugged off international rumblings with aplomb. Framed another way, the rank order of 3rd quarter returns was very closely aligned with rank order correlation of hedge fund categories to the S&P 500 Index; the higher the correlation, the higher the returns. Managed futures, commodities, and global macro have historically shown low correlations to stocks and bonds. Based upon monthly correlations over the past two years, that relationship is seemingly intact. Other Alternatives categories, while having higher correlations with equities, generally do so with considerably less volatility.

Click here to continue reading.

Posted on Tuesday, October 18, 2016 @ 4:00 PM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts


 PREVIOUS POSTS
Broad Commodity ETFs Gain Traction in Q2: Will the Trend Continue?
Alternatives Update 2nd Quarter 2016
Second Quarter 2016 CEF Review
Three-Year Anniversary for the Largest Actively Managed High Yield ETF
First Quater 2016 CEF Review
Are Expense Ratios a Dependable Predictor of Returns for Large Cap US Equity ETFs?
Staying the Course with FVD
Robust Growth for Municipal Bond ETFs in 2015
The Return of Volatility and the Case for Earnings Quality
Third Quater 2015 CEF Review
Archive
Skip Navigation Links.
Search by Topic
Skip Navigation Links.

 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.