Why Alternative Investments? A Glimpse into the Users of an Evolving Asset

Despite past performance woes and negative publicity, the vast majority – nearly eight in ten advisors – currently use some form of Alternative Investment (AI) in their current book of business. While the AI category is still relatively small compared to other asset classes, consideration and use continues to grow. On average, advisors are now allocating 11% of their AUM to the AI asset class. Usage is highest among national wirehouse advisors and those with the highest AUM.

AI product usage and strategy application does vary; however, certain AI categories, such as non-traditional mutual funds, have seen tremendous growth just in the last few months. According to research published by Morningstar Direct, “managed futures mutual funds have been on a tear.” Seven of the 21 managed futures funds just launched in 2011 and inflows into the category (through September 2011) have topped $3 billion.

Source: Cogent Research Alternative Investment Trends 2011™