MAJOR ADVANTAGES OF RELATIVE VALUE, ABSOLUTE RETURN STRATEGIES

  • Returns that can be positive in any market condition

  • Returns that are uncorrelated with the market, other investments, and the economy

  • Lower volatility than traditional equity investments

  • Ability to lower risk of overall investment portfolio

  • Potential to enhance returns of overall investment portfolio

MAJOR ADVANTAGES OF THE SMA STRUCTURE*

  • Alignment of interests between manager and clients 

  • Daily transparency, position monitoring, and independent pricing

  • Liquidity: ability to withdraw funds on one’s own schedule

  • Control of cash movement

  • Insulation of accounts from fraudulent linkages

  • Investor friendly terms: no lock-ups, no redemption penalties, no gating, no side pockets, etc.

*From Jack D. Schwager, Market Sense and Non-Sense (Hoboken, New Jersey: John Wiley & Sons, 2013), p. 249-250

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