An interesting development thus far in 2021 is increased investor interest in alternative investment strategies. In FUSE’s March analysis of alternative strategy products, a notable highlight is YTD Estimated Net Flows compared to 2020 Estimated Net Flows. After $14.0 billion in net outflows in 2020, the $8.4 billion in net inflows YTD in 2021 represents a 160% increase. Trends in the industry include improvement in availability and access to alternative strategies, market conditions that have created stricter demand for an asset allocation that may achieve better risk-adjusted returns, and creation of innovative new investment vehicles to satisfy demand. With alternatives becoming more mainstream and accessible to the average investor, FUSE’s expectation is that alternatives will become increasingly more common in investor portfolios.

Source: FUSE and Morningstar