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ETFs and Mutual Funds Embrace Alternative Strategies


The exchange traded fund industry has come a long way from its first offering two decades ago, covering alternative asset classes along with index stock and bond holdings. Consequently, the industry has lined up behind virtual conferences and road shows in making education a priority.

Foward, Eaton Vance and J.P. Morgan Asset Management are holding the third annual alternative mutual funds forum in San Francisco, with pit stops at Atlanta, New York and Chicago next, reports Mariana Lemann for Ignites.

The four-city road show will cover multi-alternative strategies, absolute-return investing, inflation hedging global macro strategies.

Forward also participated in our second Alts Virtual Summit May 15, along with other alternative investment strategy providers like Altegris, BlackRock, Curian, Direxion and Pimco. [Financial Advisors Primed for Alts Virtual Summit]

“Every data point we get indicates that advisors are slowly moving in the direction of adopting alternatives,” Nadia Papagiannis, director of alternative strategies at Morningstar and panelist at the virtual summit, said in the Ignites article. “We are seeing more and more advisors come to alternatives education events.”

Over the first quarter, alternative assets attracted $21 billion in new inflows, which is already  more than the $19 billion in new asset flows to alts strategies for all of 2012, according to Morningstar data.

“There are many advisors that are still thinking about dipping their toes in the water, but I see a higher level of sophistication in the questions that I am getting, such as which alternatives are a good cash or bond substitute,” Papagiannis added.

According to J.P. Morgan’s latest survey of registered investment advisors, average allocations to alts is close to 15%, compared to 4% to 5% allocations to liquid alternatives two years ago.

“People are clamoring for more information on how to access the various risks inherent in each of the alternative strategies and how … you cobble them together in a portfolio,” Geoff Marshall, director of the advisory services group at Eaton Vance, said in the article.

Advisors who are interested in learning more about alternative investments can still sign up for the Alts Virtual Summit conference and view panels on demand.

For more information on the ETF industry, visit our current affairs category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.