2014's Most Compelling Alternatives Performances
We highlight three that were Oscar-worthy--for reasons both heroic and scary.
While the core U.S. stock and bond markets produced solid gains in 2014--6% for the Barclays U.S. Aggregate Bond Index and nearly 14% for the S&P 500--returns in Morningstar's alternatives mutual fund categories were, for the most part, decidedly more muted. That's to be expected: Most managers in these groups used hedged or uncorrelated strategies, so marching in lock step with benchmark indexes is not usually part of the plan.
That doesn't mean the year was lacking in excitement, however. So I'd like to highlight what I consider three of the most compelling stories pertaining to alternatives performance trends in 2014. In the spirit of the upcoming Academy Awards (and at the risk of having my poetic license revoked), I've tethered each of these Oscar-worthy performances to an Oscar-contending film. Keep in mind that great performances aren't always uplifting--recall that Anthony Hopkins won Best Actor for playing Hannibal Lecter. There weren't too many 2014 alts performances quite that terrifying, but investors in some strategies definitely had a bumpy ride.
Josh Charlson does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.