Managed Futures Bonds Stocks Managed Futures 100 030 023 Bonds 030 100 029

Managed futures bonds stocks managed futures 100 030

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with stocks indicating diversification opportunities. Managed Futures Bonds Stocks Managed Futures 1.00 0.30 -0.23 Bonds 0.30 1.00 -0.29 Stocks -0.23 -0.29 1.00 Table 3 Correlation of Selected Asset Classes As managed futures decrease the portfolio risk, they can also enhance the overall portfolio performance. This is because managed futures are able to provide protection during the downside for the traditional assets providing increased return with lower risk. They also provide for better diversification because the funds can trade in many regulated financial and commodity markets around the world. It can earn profits simultaneously from price changes in the agricultural
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STUDY UNIT 4 FIN367 STUDY NOTES SU4-14 SIM UNIVERSITY commodity, metals, financial assets, and currency markets. By going long in anticipation of rising markets and going short in anticipation of falling market, these funds can earn positive profits in a variety of economic environments. Investing in Commodities and Managed Futures (Access video via iStudyGuide)
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FIN367 Alternative Investments STUDY UNIT 5
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FIN367 STUDY NOTES STUDY UNIT 5 SIM UNIVERSITY SU5-1 LEARNING OUTCOMES At the end of this unit, you are expected to: Distinguish between real estate investments and security investments Appraise the characteristics of real estate investments Analyse real estate investment property Evaluate investment in real estate property Analyse the investment prospects of real estate investment trusts (REITs) OVERVIEW Investing in real estate has always attracted individuals for a long time. One can invest in real estate and reap gains if the prices of real estate increase. In general, investment in real estate is huge and it is mostly financed through loans. Thus, real estate investment is generally leveraged and because of this leveraged investment, the return from the real estate investment could be high. However, it is to be noted that the real estate market moves in cycles, and if the investment is not made at the right time, it can also result in huge losses. Investing in real estate is a way of diversifying one’s portfolio of investments. It is often said that one should invest a part of one’s investment in real estate mainly because the real estate return has very low correlation with the returns from the stock markets. In this unit, we will discuss the nature of real estate investment and how real estate investment could provide diversification benefits to the traditional investments. We will also explain how real estate investment can be evaluated and how real estate investment trusts can provide an opportunity to gain exposure to real estate. READ: Study Unit 5 for FIN367
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