The [i3] Alternatives Forum was held on 22 February 2023 at the Intercontinental Double Bay in Sydney.
Until recently, buoyed by the ‘Fed put’ and the bond bull run, investors had little incentive to diversify away from stocks and bonds. In fact, any deviation from a stock/bond exposure has caused a performance drag. This has called into question the role of alternatives in the portfolio.
However, market cycles do change, sometimes abruptly.
With inflation risks triggered by the COVID pandemic and the Russia/Ukraine conflict, this new investment regime may spell the death of the 60/40 stock/bond portfolio. Long suffering investors with significant exposures to alternatives are more likely to benefit from the recent stock/bond downturn.