Direct exposures to real assets offer similar long-term outcomes to listed alternatives, but behave differently in the short-term. In a somewhat deeper dive than is usual on this blog, we ask: how should investors judge these return profiles, alongside liquidity and volatility considerations?
Correlations show us how assets have moved relative to each other in the past. As multi-asset investors, one of our key objectives is to identify assets that improve diversification. To do this, we try to combine assets with low or even negative correlations. This sounds easy, but can be surprisingly difficult in reality.