Survey Finds Continued Optimism About Alternative Investments Among Institutions and Financial Advisors Despite Questionable Per
November 16 2009 - 10:33AM
PR Newswire (US)
CHICAGO, Nov. 16 /PRNewswire-FirstCall/ -- Morningstar, Inc.
(NASDAQ: MORN), a leading provider of independent investment
research, and Barron's, a premier financial magazine published by
Dow Jones & Company, today released highlights of their second
annual national survey examining the perception and usage of
alternative investments among institutions and financial advisors.
"One of the most interesting findings from our survey is that both
institutions and advisors continue to view alternative investments
optimistically, despite their questionable performance,
correlation, and liquidity during last year's global downturn as
well as the high-profile scandals that rocked the hedge fund
industry," said Steve Deutsch, director of the pension, endowment,
and foundation database at Morningstar. "Again this year, the
majority of participants indicate that they plan to increase
allocations to alternatives, but with greater scrutiny and due
diligence given to those investments." Among the survey findings:
Current and Future Usage of Alternatives -- More than 60% of
institutions and advisors believe that alternatives will be as
important or more important than traditional investments over the
next five years. -- The majority of institutions and advisors
expect alternatives to account for more 10% of their portfolios
over the next five years; a quarter of institutions expect
alternatives to account for more than 25% of their portfolios. --
Hedge funds were the most popular alternative vehicles over the
last five years, and institutions and advisors expect to continue
to increase allocations to hedge funds over the next five years.
Motivation and Hesitation -- For both institutions and advisors,
the top three reasons for investing in alternatives remain the same
as in last year's survey: portfolio diversification, absolute
returns, and exposure to different investment techniques, like
arbitrage or shorting. -- Institutions and advisors are much more
concerned, however, about lack of liquidity and transparency than
they were last year. Definitions of "alternative" -- Compared to
the 2008 survey, fewer institutions and advisors view real estate
investment trusts and commodities as alternative asset classes. --
Both institutions and advisors tend to classify investments as
"alternative" based on the investment's strategy, i.e. absolute
return, rather than the investment's designation, i.e. mutual fund
versus hedge fund. "Perhaps most important for investment
consultants, advisors, and money management firms to note is the
survey once again found that overall both institutions and advisors
want the benefits of alternative strategies with the positive
characteristics of traditional investments--low correlation with
liquidity, absolute returns with transparency, and redemptions
without restrictions," Deutsch added. Morningstar and Barron's
conducted the Web-based survey in late September through early
October 2009; 89 institutions and 300 financial advisors
participated. Survey results appear in the Nov. 9 issue of Barron's
and online at Barrons.com. Additional results, including charts,
can be viewed online at
http://global.morningstar.com/2009Alternatives. About Morningstar,
Inc. Morningstar, Inc. is a leading provider of independent
investment research in North America, Europe, Australia, and Asia.
The company offers an extensive line of Internet, software, and
print-based products and services for individuals, financial
advisors, and institutions. Morningstar provides data on more than
325,000 investment offerings, including stocks, mutual funds, and
similar vehicles, along with real-time global market data on more
than 4 million equities, indexes, futures, options, commodities,
and precious metals, in addition to foreign exchange and Treasury
markets. The company has operations in 20 countries and minority
ownership positions in companies based in two other countries.
About Barron's Barron's (http://www.barrons.com/) is America's
premier financial magazine, renowned for its market-moving stories.
Published by Dow Jones & Company since 1921, it reaches an
influential audience of senior corporate decision makers,
institutional investors, individual investors and financial
professionals. With new content available every week in print and
every business day online, Barron's provides readers with a
comprehensive review of the market's recent activity, coupled with
in-depth, sophisticated reports on what's likely to happen in the
market in the days and weeks to come. As a result, Barron's is the
financial information source these powerful people rely on for
market information, ideas and insights they can use to increase
their professional success and enhance their personal, financial
well-being. ©2009 Morningstar Inc. All rights reserved. MORN-C
Media Contact: Alexa Auerbach, 312-696-6481 or DATASOURCE:
Morningstar, Inc. CONTACT: Alexa Auerbach of Morningstar, Inc.,
+1-312-696-6481, Web Site: http://www.morningstar.com/
http://www.barrons.com/
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