ALTERNATIVE PERSPECTIVES

Insight from our Diversified Alternatives team to help clients navigate the markets and opportunities ahead.

Themes in Focus, September 2021

Welcome to the latest edition of our Market GPS: Alternative Perspectives, where we highlight some of the current thinking from across our Diversified Alternatives team.

The nature of what constitutes a well-diversified portfolio continues to change, courtesy of an era of expansionary fiscal and monetary policy, which has fuelled an environment of persistently low yields and inflated equity valuations. This dynamic has been exacerbated by the pandemic. In the same way that COVID has made people address their own life priorities of family, work, and health, investors have been forced to reconsider their own strategies and objectives, in the context of their own liabilities and risk tolerances.

This is a fascinating period for alternatives. At a time when the standard 60:40 model arguably represents a higher-risk proposition than it has done in decades, investors are increasingly looking to incorporate alternatives into their strategies to take advantage of its distinctive performance drivers.

In this edition of Perspectives, Aneet Chachra looks at evidence of the current “Flow World” environment, where short-term flow dynamics can result in large price deviations up or down. With the risk of inflation once again making headlines, Mathew Kaleel, Andrew Kaleel and Maya Perone consider the value of an allocation to commodities.

Finally, Natasha Sibley delves into world of auto-callables to look at how banks deal with the risk associated with structured notes. This is a fast-evolving area of the industry, and one that we expect to provide a range of interesting opportunities for investors within the alternatives space.

We publish Perspectives on a six-monthly basis and seek to continue the dialogue with timely articles in the intervening months. As always, we welcome any feedback or questions you may have.

David Elms
Head of Diversified Alternatives

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Insights From Our Global Team

Minivans and flows

Investors should keep in mind the impact, both positive and negative, of fund flows on index price moves over the short term.

Commodities – super cycle or just good sense?

With multiple structural tailwinds and the risk of inflation making headlines, can commodities offer viable diversification for a modern portfolio?

Autocallables and the art of risk transfer

The realm of ‘exotic’ structured products can be seen as a difficult one to navigate for investors, but is their core proposition a simple function of ‘need and opportunity’?

OUR DIVERSIFIED ALTERNATIVES CAPABILITIES

The Janus Henderson Diversified Alternatives Team is made up of 21 investment professionals situated in the UK, US and Australia. The team is responsible for $8.6bn* in client assets and manages a range of investment solutions aimed at delivering specific outcomes tailored to meet the needs and constraints of clients. The team brings together a cross-asset class combination of alpha generation, risk management and efficient beta replication strategies, as well as the flexibility to create customised offerings. Current solutions include single and multi-strategy hedge funds, managed futures, equity and commodity enhanced index strategies and bespoke alpha solutions.

*As at March 31, 2024