Liquid Alternatives Outlook

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  • 01 mins 36 secs
Michael Cooke of Mackenzie Investments describes why he thinks alternative investment strategies are the new frontier.

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MASTERCLASS: ETFs - Q1 2019

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It's trying to strike that appropriate blend between something innovative, value added differentiated, but not too expensive, not too complicated. I think that's where asset managers are really going to have to put some thought against whether some of these strategies are best accessed in a more conventional mutual fund forum, as opposed to an ETF forum. I think more education too, because I think there's still a little bit of confusion about what liquid alts exactly are. Steve touched on it, but you've got liquid alternative asset classes and alternative investment strategies that are being lumped under the same banner. Like to Steve's point, liquid alts have been around in different forms for a long time. Commodities as an asset class would be viewed as alternative, they've been available under the ETF wrapper for more than a decade now. I think the nuances need to be better understood, alternative strategies, long-short strategies, leverage strategies, arbitrage strategies, that would be better defined under liquid.
Alternative investment strategies I think are the new frontier, but it's just trying to find that blend between something innovative and whether it's best delivered in ETF form. I'm sure we and others will figure that out in time, but you just want to be mindful of all of those elements because it's not just as simple as throwing something out there if it's not competitively priced, if it's too complicated, if it's too expensive. You got to be winning all of those factors into new strategies.


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