MacNicol’s The Alternative Asset Trust Quarterly Commentary- July 2022
The MacNicol Alternative Asset Trust is a multi-strategy, alternative investment platform designed to generate returns that are positive and uncorrelated with public stock or bond markets. The Trust, through its underlying limited partnerships invests in real estate, private equity, and hedge funds. In total the Alternative Trust is invested in more than 150 separate real estate projects, private businesses, and hedge funds. The advantages of our approach to alternative assets include effective diversification, enhanced liquidity and a less volatile return profile compared to the individual asset classes themselves.
Alternative Trust Update: The goals of the Alternative Trust are to generate attractive risk-adjusted returns and help better diversify portfolios of public market investments. During the 2nd quarter of 2022 the Trust was broadly flat net of all fees and higher by 1% by the end of the first half. During the quarter, the Trust provided stability to a world that continues to cope with elevated geopolitical risk, high inflation, shifting monetary policy and the new challenge of more pointed questions about the economy. During this period a range of alternative investment opportunities were considered. However, the portfolio manager concluded that in the end, our time-tested approach towards alternatives would remain with only subtle refinements to the overall strategy.
First Quarter 2022 Highlights:
As previously mentioned, the second quarter of 2022 was defined by many of the same investment themes that dominated the first quarter but with the added complexity of an economy that may be losing momentum. This had major implications for global equity markets, which were lower during the second quarter and a range of traditional alternatives such as bonds and gold that were lower too. Over this period the Trust was off by just ten basis points mainly as a result of our hedge fund holdings, which will be discussed more thoroughly later on.
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