Alternative strategies earn their keep over six months of market extremes

JEFF BENJAMIN, INVESTMENT NEWS


The key is looking beyond broad category averages to focus on portfolio managers and the investment process


It has been at least five years since Dick Pfister can recall a six-month period that has been so favorable to alternative investment strategies.

Mr Pfister, founder and president of AlphaCore Capital, a firm that allocates between 15% and 30% of client assets to alternative investments, said the Jekyll-and-Hyde scenario of the last two quarters presented an ideal test for noncorrelated investments.

“We look at some alternatives as diversifiers,” he said. “But we will also look at other alternatives as ways to capture chunks of up markets.”

The message that investors, advisors and allocators like Mr. Pfister understand is that the big picture perspective rarely looks good for alternative investments, which is why those who dwell on broad category averages often get stopped at the gate.