Okay, so managed futures, as an asset class, performed well. They were up when the market was down and down when the market was up; the very definition of non-correlation. But most other so-called alternative investment products and strategies didn’t live up to expectations.
“Those non-correlating assets sure were correlated during this downturn,” says Russell Diachok, president and CEO of Geneos Wealth Management, a Denver-based broker-dealer, in Investment Advisor’s September cover story.
If the current crop of alternative offerings just isn’t doing it for your more adventurous clients, here is a list of exotic investments more suited to their liking.
1). Wine (of course)
If the price goes bust, they can always get drunk. The Wall Street Journal recently noted top vintages have outperformed almost every other asset class over the past decade.
“The plus side of wine investment is that as time goes by it gets scarcer as people drink it. The likelihood is that over time–as the wines get older, rarer and in greater demand–prices will inexorably increase,” Mark Bedini, chief executive and founder of wine brokerage Fine + Rare Wines Ltd, told the paper.
For those of us less well-to-do, the other investment route the Journal highlights is through wine investment funds. These tend to charge a 5% subscription fee, annual management fees of 1.5% or 2.5% and an average exit fee of around 20% of the upside. The Vintage Wine Fund, Wine Asset Managers and The Wine Investment Fund have all been authorized by the U.K. Financial Services Authority.
The New York Times alternately describes him as a Willy Wonka and a Bond-style villain, depending on one’s point of view. Except that rather than holding the planet hostage to Nuclear Armageddon from his secret base on the Moon, hedge fund manager Anthony Ward is trying to corner the cocoa market.
By one estimate, the Times notes, he has bought enough to make more than 5 billion chocolate bars. His activities have helped drive cocoa prices on the London market to a 30-year high.
Through his private investment firm, Armajaro, he now controls a cache equal to 7% of annual cocoa production worldwide, a big enough chunk to sway prices.