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We normally think of alternative investment funds as funds whose performance is not closely associated with the underlying investment market. Brookfield Investment Funds PLC use these types of funds widely as a way of reducing exposure to risk within a portfolio, without the need to sacrifice long-term performance.
As is true with traditional funds, the true value of using alternatives is to apply a portfolio approach. This is where many approaches, styles and underlying asset classes are combined to work in synergy with each other. This assists in the production of consistent returns that are not really exposed to the performance of the volatility of the investment markets.
Inherently alternative investments are generally more complicated than traditional investments, which dictates that the skill set required to manage them correctly is not always found within the arena of traditional investments. On this note, when choosing an alternative investment fund, Brookfield Investment Funds PLC looks to identify those that have shown particular understanding and expertise within the underlying asset arena, having consistently delivered above-average returns within the constraints of diligently managed risk budgets.
There are a variety of styles within this category:
Exposure to currency investments can be achieved through systematic funds/actively managed funds that use mathematical models that aim to encompass trends, interest rate differentials and self-correcting movements between currency pairs and combinations of currency pairs/combination of currency pairs.
These are managed by numerous long/short global specialists who use various asset classes including commodities, credit, debt, emerging market, European/UK/US equities etc.
Multi-Asset absolute return investments, consist of a broad variety of individual positions with the goal of producing positive returns in any given market condition, consisting of traditional asset classes including advanced investment strategies using derivative, property, bonds and equities.
Investments generally involve investors combining their capital for investing into privately held companies under the management of a devoted private equity fund manager; they are long-term in nature, offering little or no liquidity until maturity.
These are often referred to as systematic, quantitative, managed futures or CTA’s and computer-derived strategies that trade global exchange-traded options and futures in currencies, short-term interest rates, bonds, equities indices and commodities.