The rush to get liquid alt strategies to market has lead many of them to be missing something, beta.
Investors don’t want a glorified bond fund that gives them mid-single digit returns and acts as a risk reducer to a portfolio. Investors instead want their liquid alt strategy to capture most of the asset class beta in rising markets, then protect those gains in down markets. This is often referred to as asymmetrical returns.
Liquid alts are the fastest growing product group in the asset management industry, and that trend should only strengthen in the coming year. After all, liquid alternatives gained popularity amid the financial crisis.
Managed Volatility Blog 