Morningstar-owned asset allocation services provider Ibbotson Associates Australia has launched a new alternatives fund designed to give investors a liquid and cost-effective exposure to the asset class.
The new fund, called the Ibbotson Diversified Alternatives Trust, is intended to complement a traditional portfolio by introducing broad exposure to alternative investments.
"Many investors want an allocation to alternative investments, but may not have the expertise or purchasing power to assemble a diverse portfolio of non-traditional investments," Ibbotson Associates Australia managing director Daniel Needham said.
The fund is managed by Ibbotson's Australian alternatives team, led by Ibbotson head of alternatives Michael Coop.
"The trust is invested in liquid assets and strategies that have different return drivers than traditional assets like shares and bonds, and are priced to offer attractive risk-adjusted returns," Coop said.
The fund targets mainly independent dealer groups and self-managed superannuation funds.
It aims to generate a return of cash plus 2 per cent a year net of fees and over a rolling five-year period, and is designed to be between 10 per cent and 30 per cent of an investor's portfolio.
"You need to have a meaningful exposure for it to work," Coop said.
The fund uses a range of instruments, including global listed infrastructure, hedge fund beta and commodities, as well as less commonly used instruments such as insurance-linked securities.
It also had an exposure to equity market volatility, which should protect the portfolio against equity market falls, Coop said.
