Why alternative solutions
So much choice out there
Fixed deposits, unit trusts, endowments or life policies? We’re offered numerous investment options by many institutions and all question whether we’re making the right decisions with our hard-earned savings. We know that we need long-term growth that exceeds inflation and that it’s prudent to diversify our portfolio. It can be difficult to do this in a rapidly changing world, within an ever-changing global financial marketplace.
Changing investor trends towards alternatives
The turmoil and regulatory changes following the 2008 – 2009 global financial crisis caused investors to adjust their behaviour. They began sourcing new ways to achieve growth and better methods to protect their capital in the event of another market crash. One of these ways was to invest in alternatives. RMB is an established niche provider of alternative investment solutions. Global trends suggest that 15% – 30% of your portfolio should be allocated to alternatives and it is estimated that 22% (i.e. US$22.7trillion) of global assets under management will be allocated to alternative assets by 2020.
Alternative assets provide uncorrelated, less volatile returns
Alternative assets fall outside of the definition of the traditional asset classes of equities, bonds and cash. Traditional assets are used very differently within alternative investments and their returns are uncorrelated to market performance. Alternative assets typically include hedge funds (which use financial instruments to protect investors from massive downswings and loss of capital). Alternative asset returns are therefore 'smoother'.