Per Morningstar, the category average per annum returns for Alternative Funds is *negative* over the past 3, 5, and 10 years. Commodity Broad Basket isn't much better being negative over the past 3 and 5 years and a meager +3.06 per annum over 10 years. Yet one would think these funds are the cat's meow the way they are revered. What happend to plain old vanilla investing? I guess investors are still scared and scarred from 2008 and have missed the (almost) once in a lifetime move in stocks and risk-on bonds (junk, mortgage etc.) and have instead run to the *perceived safety* of a whole subset of vastly underperforming funds. Yet, the sponsors keep coming out with these funds, but under the guise of different bells and whistles.
Edit: Bear Market funds are also in the Alternative Fund category but it goes without saying about their 3, 5, and 10 year results.
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LTCM collapse
Tech bubble
9/11
Financial crisis and great recession
High speed trader exploits
Dark pools
Flash crash
Insider trading scandals
Ponzi schemes
Deficit spending
Growing entitlements
Aging demographic
Contagion
Political gridlock
Record debt
Trumps...
Value opportunities
Record earnings
Healthy corporate books
Highest productivity ever
Consistent fiscal policy
Favorable monetary policy
Recovering housing
Increasing auto purchases
Decreasing unemployment
Rising consumer confidence
Growing GDP
In short, fear of what can go wrong over confidence in what can go right.