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Do alternatives really hedge against volatility?

Funds

Do alternatives really hedge against volatility?

Chan Jian Ming Published on Mon, Jul 11, 2016 / 5:44 PM GMT+8

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SINGAPORE (July 11): When global financial markets dived in the immediate aftermath of Brexit, alternative funds proved resilient. From June 23 onwards, the S&P 500 index closed 5.3% lower at its worst point while in Europe, Germany’s DAX and France’s CAC indices fell 9.6% and 10.8%, respectively. In contrast, alternatives had materially smaller falls than worldwide equity indices (see charts below) in the same period. Some funds even registered gains.

Among US dollar-based funds, at worst was the 3.9% fall in the $924 million PineBridge Glbl Dyn Asset Allc Y fund which was less severe than the S&P 500’s drop. Meanwhile, the $2.3 billion Schroder ISF Strategic Bd A Acc fund managed the best performance by staying flat.