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Asset Allocation and Alternative Diversification
Alternative Investment Allocation
In today’s complex financial markets, investors can select from an impressive array of investment vehicles. Each vehicle carries potential return, but also risk, making it important to choose wisely. Unless one has perfect foresight, holding only one asset is a high-risk strategy. Thus, most financial experts recommend owning a variety of investments that are expected to perform differently from each other with changing economic conditions.
In the last few years, a new asset class has shown up on the asset allocation radars of most investors: alternative assets. This specialised research section focuses on the inclusion of these assets in a traditional investment portfolio. In fact, given the heterogeneity of the asset class and the lack of models for hedge fund returns, asset allocation within alternative assets presents a challenge.
BACKGROUND
Summarises the state of the art of literature on this topic.
REVIEW OF CURRENT RESEARCH
An overview of external research papers that have recently been released on this topic. Both a review by the editor and a link to the full version of the paper are available.
François-Serge Lhabitant
PhD, is the Head of Research at Kedge Capital, and a professor of finance at EDHEC Business School. He is also Professor at the University of Lausanne and the Thunderbird Graduate School of International Management. François-Serge is the editor of this specialised research section of EDHEC Risk.