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Portfolio > Alternative Investments

FPA Teams With CAIA to Help Advisors Look Beyond Stocks and Bonds

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The Financial Planning Association and Chartered Alternative Investment Analyst Association have teamed up on an initiative designed to make it easier for advisors to offer their clients alternative investments, the groups said Tuesday.

As part of the initiative, the UniFi by CAIA specialized learning platform for advisors and other professionals across the private wealth management industry is now available to all FPA members at a discount, they said.

UniFi was “built to meet the needs of client- and advisor-facing professionals in asset and wealth management” and “provide access to essential educational materials as they work to stay ahead of the fast-moving and rapidly-expanding alternative investment universe,” the organizations said in a news release.

Private debt and digital assets microcredentials are now available and “many more offerings and enhancements [are] in the pipeline for 2H 2023 and beyond,” they said.

This year alone, UniFi by CAIA added microcredentials focused on private debt and digital assets, respectively, with “more in the works in the months to come, along with a series of forthcoming enhancements to its Fundamentals of Alternative Investments certificate program,” the organizations noted.

CCAIA looks forward to helping FPA members “stay ahead of the latest trends and developments across the full spectrum of alternative investments,” Aaron Filbeck, CAIA managing director and head of UniFi by CAI, said in a statement.

The partnership also follows the recent release of the latest iteration of FPA’s annual Trends in Investing Survey report, which it said revealed a growing interest among financial professionals in putting alternative approaches to work in client portfolios.

This year’s survey revealed that 28% of investment professionals actively invest in or search for alternative investments that meet the needs of their clients, according to FPA. In comparison, just 30% are familiar with alternative investments but don’t plan to invest in them or recommend them to their clients.

Meanwhile, 50% of investment professionals are investing in or recommending that clients invest in funds that provide access to alternative investment classes or strategies, while one in five are making direct investments in a product, project or company.

“Our research shows that the use or recommendation of alternative investments has doubled in some cases since the start of the pandemic,” according to Patrick D. Mahoney, FPA chief executive officer.

“Those numbers could be even higher if more professionals had access to quality education, which is why we are working with UniFi by CAIA,” he said in a statement.

“As equity markets sank more than 19% in 2022, Morningstar’s alternative categories delivered returns ranging between positive 16.9% and negative 9.2%,” according to Karen Zaya, analyst, multi-asset and alternatives strategies for Morningstar Research Services.

“Trailing three-year correlations with the Morningstar US Market Index varied between 0.98 and negative 0.11, with five categories above 0.77,” Zaya said June 14 in a research note. “Unsurprisingly, categories with the weakest links to stocks fared the best with respect to returns,” she said.

Meanwhile, the “systematic trend  (negatively correlated) and equity market-neutral (very weakly positively correlated) categories posted positive returns of 16.9% and 5.9%, respectively,” she noted.

“What might evoke a little more surprise is that the macro-trading category nearly broke even in 2022 despite a 0.88 correlation with equities,” she added. “This was due to its low equity and bond beta, which is an important consideration when assessing alternative categories’ performance.”

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