Reprinted with permission from LexisNexis.
With increasing frequency, experienced high-wealth individuals and institutional investors (such as banks, pension plans, insurance companies, etc.) are pursuing alternative investments to stocks and bonds to better distribute their overall risk, achieve higher returns, diversify their investment portfolio, and protect against market downturns. According to the Investment Company Fact Book, globally, the total amount of worldwide assets invested by institutional investors in mutual funds and exchange-traded funds in 2014 was $33.4 trillion, which increased to $37.2 trillion in 2015. In fact, allocations to nontraditional investments of stocks and bonds to alternative assets, especially investments into various real estate structures and, to a lesser extent, hedge funds, private equity, and commodities, have grown from 5% in 1995 to approximately 25% in 2015 (as reported by Towers Watson, a global professional services firm for risk management and human resource consulting). More >