H-Squared’s Post

Hedge funds, once seen as exclusive to institutions, are now gaining traction among wealth advisers and high-net-worth individuals as tools for true diversification beyond the traditional 60/40 portfolio. This shift is driven by underperformance of traditional portfolios and doubts about the diversification value of private credit and real estate, which often carry similar macroeconomic risks as equities and bonds. Unlike these traditional alternatives, hedge funds offer flexibility, including long/short strategies, relative value plays, and systematic approaches that leverage data and adapt across time horizons, helping them perform well in volatile, complex markets. Systematic strategies, in particular, are highlighted for their data-driven investment processes and adaptability, making them effective diversifiers when correlations between traditional assets break down. Access to hedge funds is becoming easier for advisers via platforms like iCapital, making them a practical and appealing option to enhance portfolio construction for private wealth clients seeking uncorrelated returns. https://lnkd.in/gNbdZ2r7