Why alternative funds?

Mike JonesInvestment Insights

MIKE JONES

This month I would like to introduce you to two things: the first is the strategy of introducing alternative funds to a portfolio. The second is the management firm AQR.

What is meant by the term alternative investing?

While the specific component parts of an alternative investment can be quite complex, it might help to understand the why of alternative investments before you delve into the what.

At its core, alternative investing seeks investments in assets with characteristics different from stocks, bonds or cash. Stocks, bonds and cash have long been the primary elements used in most investment portfolios. The use of so-called alternative investments came as investment managers sought to add additional (or alternative) investment characteristics to the overall portfolio mix. Those characteristics might be higher returns, lower volatility or (most often) a blend of the two to meet the needs of a specific portfolio.

Let me quote for you a definition of alternative investing from a recent white paper produced by Baird Private Wealth Management:

Alternative investments utilize a different approach to investing than do traditional equity or fixed income investments. This approach may involve holding both long and short positions in securities and holding private securities instead of publicly traded investments, and there may be derivatives or hedging strategies as well. Investors using alternatives may also have a goal of achieving a particular level of absolute returns as opposed to relative performance versus an index.

As always, a picture can paint a thousand words. To further assist you in understanding the why of alternative investments, take a look at the following charts, which show comparisons between the standard deviations and returns of portfolios with and without alternative investments. Recall that standard deviation is a measure of an investment’s volatility.

 

mike graph march

mike graph march 2

And now, ARQ

Beginning in March 2016, many of you who you use Argent Advisors as the investment manager of your portfolio will notice a new name on your statement — AQR. AQR is a global investment manager with $141.4 billion of assets under management. They were founded in 1998 and currently have 617 employees.  I have been very impressed with their performance and delivery in the alternative funds space and look forward to a long and profitable relationship with them.  Welcome AQR.


Mike Jones is Managing Director / Investment Group of Argent Advisors, Inc. Write to either at 500 East Reynolds Drive, Ruston, LA 71270 or call (318) 251-5800.  This newsletter is available via email on a free subscription basis. You can subscribe by clicking here. Direct any questions, comments or suggestions to Byron Moore at bmoore@argentadvisors.com or to Mike Jones at mjones@argentadvisors.com.
Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Argent Advisors, Inc.), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.
Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  The opinions of any single advisor do not necessarily reflect the opinions of Argent Advisors, Inc. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Argent Advisors, Inc..  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.
Argent Advisors, Inc. is a registered investment adviser registered with the Securities and Exchange Commission. Argent Advisors, Inc. is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice.  Argent Advisors, Inc does not offer tax, legal or insurance advice. If you are a Argent Advisors, Inc.  client, please remember to contact Argent Advisors, Inc., in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Argent Advisors, Inc.’s current written disclosure statement discussing our advisory services and fees is available upon request.

 

About

Argent Financial Group

Celebrating its 30th anniversary in 2020, Argent Financial Group (Argent) is a leading, independent, fiduciary wealth management firm. Responsible for more than $30 billion in client assets, Argent provides individuals, families, businesses and institutions with a broad range of wealth management services, including trust and estate administration, investment management, ESOPs, retirement plan consulting, funeral and cemetery trusts, charitable organization administration, oil and gas (mineral) management and other unique financial services. Headquartered in Ruston, Louisiana, Argent was formed in 1990 and traces its roots back to 1930.

Latest News & Resources

Insights

Why a Corporate Fiduciary Could Be Right for You

Why a Corporate Fiduciary Could Be Right for You

In today’s world, estate planning can be an intense and complex process. These issues can be caused by many factors, such as federal and state tax laws and the types of property or assets a person owns. If you layer on unique family dynamics (e.g. a blended family,...

The Morning View: September 24, 2020

The Morning View: September 24, 2020

BY: MARSHALL BARTLETT Senior Vice President / Portfolio Manager In this morning’s data, Initial Jobless Claims were 870,000 for the week ending September 19th, an increase from the previous week and higher than expected. Continuing Claims were 12,580,000 as of...

Interested in speaking with

one of our experts?