van Eyk favours alternatives in asset allocation review
van Eyk Research has recently completed its annual strategic asset allocation (SAA) review, resulting in a similar allocation model to that it presented in 2008 in the early stages of the global financial crisis.
This is despite starting with a blank piece of paper and building the new structure from the ground up, according to van Eyk chief executive Mark Thomas.
The 2008 SAA was controversial at the time due to a high 20 per cent allocation to alternative strategies (including emerging markets and gold) and a reduced equities component, he said.
The new model features 28 per cent Australian equities, 17 per cent global equities, 20 per cent alternatives, 18 per cent fixed interest, 12 per cent listed property and infrastructure, and 5 per cent to cash.
The similarity between the two models is partly due to van Eyk's views that we will see continued long-term volatility, according to van Eyk head of research John O'Brien.
Alternative assets should continue to offer superior risk-adjusted returns over the next three to five years, although van Eyk will continue to maintain a healthy allocation to equities because they are attractively priced and offer tax advantages, O'Brien said.
Deleveraging is happening now, volatility is happening and will be ongoing, and although inflation hasn't really happened yet, it's likely that it will in the next few years, he said. Investing in alternative assets such as gold and other commodities will help offset this inflation risk, he added.
Recommended for you
Clime Investment Management has faced shareholder backlash around “unsatisfactory” financial results and is enacting cost reductions to return the business to profitability by Q1 2025.
Amid a growing appetite for alternatives, investment executives have shared questions advisers should consider when selecting a private markets product compared to their listed counterparts.
Chief executive Maria Lykouras is set to exit JBWere as the bank confirms it is “evolving” its operations for high-net-worth clients.
Bennelong Funds Management chief executive John Burke has told Money Management that the firm is seeking to invest in boutiques in two specific asset classes as it identifies gaps in its product range.
