Alternative Investments

It's hard to make a case for attractive returns from any asset class over the next year. We dial down risk a bit but ending our overweight on junk bonds. Investors should pick up yield where they can but without taking excessive risk.

Cuba will become a notable frontier market now that the Communist regime has no foreign geopolitical partner to prop it up. A poor demographic profile does not prevent the country from capitalizing on American tourism. It also stands to benefit from access to U.S. consumers and rising Chinese consumerism.

Post-Brexit uncertainty will continue for some time. But we were already cautiously positioned, and would not go any more defensive.

The benefit of including alternative assets in a traditional portfolio is almost at an all-time high, due mostly to increased return enhancement. This is despite the growing popularity of the alternatives industry and the larger number of entrants, which have reduced alpha opportunities.