Managed Investments Overview

Share markets throughout the world have developed a reputation for their volatility and uncertainty. During these times, investors typically retreat to perceived “safe havens” such as cash. However, with global interest rates at historically low levels, this option may not be the answer.

Are there alternatives? Demand is increasing amongst large and small investors for alternatives to fixed deposits and traditional equity investments. Some of these alternatives are Hedge Funds, Commodity Trading Advisors (CTA’s) and Managed Discretionary Accounts (MDA’s).  In the past, many of these alternatives were generally only available to wealthy individuals or institutions.  Many of these products are now within reach of smaller investors, enabling investors to potentially enhance their investment returns irrespective of the share market, interest rate or economic performance.
When constructing a balanced investment portfolio, consideration needs to be given to the similarities between different asset types in order to reduce correlation. Modern portfolio theory states that a diversified approach to investments produces better and more consistent results over the medium and long term.

With this in mind, investments included in a portfolio have the effect of reducing volatility and increasing the potential for overall returns. This non-correlation to the share market together with investment diversity explains the growing popularity of non-share market related managed investments.

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