Stay updated with breaking news from Absolute Returns. Get real-time updates on events, politics, business, and more. Visit us for reliable news and exclusive interviews.
Protection and fixed income strategies have had to adapt in recent years to the extraordinary economic environment and investors’ reluctance to miss out on returns, but that doesn’t mean the foremost experts in portfolio construction and blending strategies aren’t worried about how some portfolios are positioned.
We broadly think about the sector as a collection of three sub-sectors: quantitative/systematic, alternative, and traditional. At Latitude Investment Management, we sit firmly in the last category. Many funds deploy quantitative or systematic strategies, often using a long-short equity or relative value approach to time markets and generate returns for investors. The benefit is a lower correlation to major asset classes, although the potential for miscalculating risk can lead to sharp drawdowns. Moreover, these strategies involve frequent trading and portfolio turnover, adding cost and in...