To handle these challenges, buyers face a regular menu of choices (Exhibit 1). To enhance the tradeoff between danger and return in portfolios, they’ll reallocate to asset lessons offering higher risk-adjusted returns, decrease correlations, or a little bit of each. In recent times, for instance, sure buyers have elevated their allocations to options, together with illiquid non-public belongings like non-public fairness and actual property. Though this has been a profitable method, these kind of automobiles aren’t out there to many particular person buyers.
