Not surprisingly, alternative investments featured much less prominently in client portfolios than did equities or fixed income investments. Of the various alternative investments described in the survey, tactical allocation investments were the most favored, with one in five advisors (21%) reportedly using them at least modestly in client portfolios. Managed futures were much less popular, with only 3% of advisors reportedly using them at least modestly.
Currency-related alternative investments, meanwhile, were also only used modestly by 3% of advisors. However, that strategy lags managed futures when considering the percentage of advisors who avoided either strategy entirely—82% avoid currency alternatives while just 75% avoid managed futures.
Advisors across the industry reported a strong preference for active strategies in alternative investments. Across all alternative investments, an average of 61% of advisers preferred an active strategy versus just 19% for passive. The remainder reported using both.
Next Part 4 of 4: Looking at the Year Ahead