JP Morgan Asset Management released its inaugural Global Alternatives Outlook featuring a 12- to 18-month outlook for each of the key alternative asset classes and highlighting the firm’s CEOs, CIOs, portfolio managers and strategists’ most promising investment ideas over that time horizon.
The report aims to provide investment direction in a year of transition and change as markets adjust to global quantitative tightening, credit markets awash in money with loose covenants, newly volatile equity markets, the threat of trade wars and tariff uncertainty, and a long-in-the-tooth economic expansion.
“As market risks continue to build in 2019, our Alternatives Outlook examines how, when and why investors might want to consider using offensive and defensive approaches across a wide range of alternative asset classes and investment strategies,” says Anton Pil, Managing Partner, JP Morgan Global Alternatives. “In the current environment, investors can look to increase returns and reduce risk by focusing on assets that generate stable streams of income, and on strategies that benefit from the rising volatility.”
“The need for accurate alternatives investment direction, guidance and perspective may never be greater,” says Christopher Hayward (pictured), Managing Partner, JP Morgan Global Alternatives. “In the late-cycle, investors are increasingly looking beyond traditional asset classes to achieve their objectives, recognising that a sizeable allocation to alternatives can be additive to their portfolios.”
The report also outlines an approach to alternative asset portfolio construction that comprises three components: a core foundation, with assets such as core real assets and core private credit designed to provide stable income with lower volatility; core complements, with assets such as hedge funds adding diversification through differentiated returns; and return enhancers, with assets such as distressed credit and private equity seeking opportunistic returns.
