Select Page

Lately DevDosh Ltd covered that in the wake of the last financial crisis investors both private and institutional took a long hard look at how they approached their investment portfolios, this was also the case when it came to pension funds.

The large institutional and state pension funds saw an investment opportunity outside that of the traditional stocks and bonds and took refuge from the storm in alternative investments. This investment was in the form of a myriad of assets with the likes of private equity, hedge funds, real estate and commodities leading the way.

During the period of 2005 and 2015 DevDosh Ltd saw the proportion of people’s investment portfolio put into alternative investments more than double from 9% to 24%. This was a real changing of the guards as investors went in search of greater diversity to hedge against risk, and to seek at those returns that they no longer had the confidence could come solely from the conventional investments they had relied on in the past.

One of the main questions on investors mind right now is how this change in strategy affected investment returns.

A study by website MarketWatch has shown that when these pension plans increased the amount of alternative investments in their portfolio by 10% it reduces the after-fee return by between 30 to 45 base points compared to investing in equities.

MarketWatch said that the problem with this equation is that it does not differentiate between the different asset classes of alternative investments. They then chose to conduct a second equation that looked at the four major asset classes: private equity, hedge funds, real estate and commodities. What they found was that the majority of the negative impact on the portfolio from alternative investments could be attributed to hedge funds.

The study also showed that the alternative investments had little to no effect on the volatility of the overall returns of the portfolio.

MarketWactch said about the study: Our conclusion? While the focus on returns and volatility may be too narrow and the time periods analyzed too short to draw any definitive implications, the relationship between alternatives and public plan performance merits further analysis.

Now DevDosh Ltd would like to steer clear of a shameless plug here but I think the information warrants just that.

People should also now that they can diversify their portfolio with alternative investments, enjoy the reduced risks but still enjoy great fixed returns that are more than a sizeable.

Here at DevDosh Ltd we offer investors the opportunity to invest into an asset backed UK property collective investment scheme that shows a 10% annual return with little risk what-so-ever.

The scheme is done in the shape of an SPV or Special Purpose Vehicle which means any and all investors own shares in the SPV (which is set up as a limited company so investors can enjoy all the security that will bring) at a level matching their investment. This is a product that we are immensely proud of and if you would like to talk with one of our experienced advisors today please just pay a visit to today.