Asset Allocation to Alternative Investments
Free CFA Level III: Private Markets lesson in Portfolio Construction. 26 min read, ~3,868 words.
Alternatives serve diversification, return enhancement, or inflation hedging: PE enhances return, real assets hedge inflation, hedge funds vary by strategy. Bonds and alternatives mitigate equity risk through different mechanisms; in a 2022-style inflationary drawdown the stock-bond hedge fails and diversifying hedge funds fill the gap. Data problems distort alternative statistics...
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- alt investments
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