Here’s what to expect for alternative investments in 2020
Some of the finest minds in alternative investing converged on the City of Brotherly Love last week at Financial Advisor Magazine’s Inside Alternatives & Asset Allocation conference. This year’s theme, “Sound Solutions for Volatile Times,” offered a variety of provocative discussion topics, from big data to a “survival guide” for a global slowdown. Attendees were given the chance to catch up on the latest ideas around defensive asset allocation strategies and stable, income-generating opportunities in an economic environment fraught with uncertainty. For a couple of Gregory FCA public relations pros, the conference also provided a wealth of insights to leverage in marketing efforts.
Here are some aspects of the alternative investment arena that present challenges and opportunities for financial marketers, as well as some actionable ideas to utilize in a year-end PR push on your firm’s behalf:
Real estate and real assets
Let’s take a moment to recognize the “great wealth transfer” underway. By 2061, baby boomers will bequeath $59 trillion to their millennial heirs. Real estate developers are following that money by chasing the millennial renter, explained speaker Asheel Shah of EJF Capital. With low supply and high demand, money is pouring into multi-family properties — the so-called “next step” for this younger demographic. The risk-averse who still want to tap into the millennial market could find this slice of real estate especially attractive.
So how can this information be put to work in your marketing strategy? To get in front of the millennial audience, consider developing a video series that spotlights real estate as a safe-haven investment. For example, this series could include brief, informative videos that showcase your firm’s investment philosophy and how, in a volatile market environment, the REIT vehicle allows you to achieve risk-adjusted returns and income for clients. Videos often see great engagement on social platforms, and can be repackaged and distributed via targeted email campaigns as well.
Alternative ETFs for low-cost diversification
Conventional wisdom suggests that all alternatives are expensive. But savvy investors have their eyes on a “new class of ETFs that seek to deliver alternative strategies at lower costs.” F/m Acceleration Chief Investment Strategist Rick Lake explained that these ETFs boast more liquidity, and offer three potential uses within investor portfolios: to reduce risk, enhance returns and diversify.
Taking a different stance from retail investors who believe alternative investments convey a lack of confidence in traditional equities, panelists at the event argued that that they offer a stable allocation across multiple market cycles. Or as Lake so aptly stated, an alternative ETF “zigs when other parts of the portfolio zag.”
So what better way to tell the 2019 performance story than with an infographic? Leveraging YTD data, tap your marketing/PR team to design a piece that visualizes how your alternative ETF reduced risk and enhanced investor returns during periods of market volatility. It’s a compelling story to tell, and one that should deliver great value to clients and prospects alike.
New concepts in fixed income
Today’s ongoing market volatility, mixed with low-interest-rates, has more investors searching for yield in the fixed-income market. Unconstrained bond funds, interval funds, interest-rate-neutral funds and debt instruments such as blind pools represent the next generation in fixed-income investing. Social media can prove vital to attracting potential investors in this environment, and one tactic likely to resonate with a wider audience is the use of eye-catching quotes that reflect your clients’ thought leadership.
For example, during a panel session at the conference, Mike Landis of Wavelength Capital Management shared his outlook on the fixed-income market by stating, “It’s not your grandma’s fixed-income market anymore.” This quote is both unique and relatable, as it describes the dramatic shift he expects to see in the investment landscape over the next several years. In fact, Landis’ quote stood out so much to us so that we decided to tweet it. Compared to our other tweets from the conference, this post received almost 50% more engagement.
A deep dive into private markets
The 10-year bull market continues to slow, along with its potential to deliver future returns; while the private equity market could be an attractive avenue for investors looking for a hedge. Marketers will find their positioning more important than ever as these sectors take center stage. Firms that tailor their messaging to highlight the impact they have on the community, along with the technology underpinning their research, may find success in attracting next-generation investors. Millennials are expected to invest in companies that align with their interests, while private equity firms are set to lead influential investing trends through 2050 and beyond.
No matter the strategy or asset class, talk of impact investing dominated every panel at the Inside Alternatives & Asset Allocation conference. Investment firms see the need for a fundamental shift to target younger investors, whether through ESG or technology-driven investment instruments. Marketers in the financial services industry cannot afford to ignore the demands of next-generation investors in the years to come.