2020年CFA一级教材V6：备选方案投资和投资组合管理

©CFAInstitute.Forcandidateuseonly.Notfordistribution.

ALTERNATIVE

INVESTMENTS

ANDPORTFOLIO

MANAGEMENT

CFA

®

ProgramCurriculum

2020LEVELIVOLUME6

•

•

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HowtoUsetheCFAProgramCurriculum

vii

vii

viii

viii

x

BackgroundontheCBOK

OrganizationoftheCurriculum

FeaturesoftheCurriculum

DesigningYourPersonalStudyProgram

Feedback

xi

AlternativeInvestments

StudySession17

AlternativeInvestments

3

Reading50

IntroductiontoAlternativeInvestments

Introduction

5

5

AlternativeInvestments

6

CategoriesofAlternativeInvestments

ReturnstoAlternativeInvestments

PortfolioContext:IntegrationofAlternativeInvestmentswith

TraditionalInvestments

10

12

13

14

15

16

20

20

27

28

30

31

32

36

38

39

40

41

42

45

46

48

48

50

50

51

52

55

55

56

InvestmentStructures

HedgeFunds

HedgeFundStrategies

HedgeFundsandDiversificationBenefits

HedgeFundFeesandOtherConsiderations

HedgeFundValuationIssues

DueDiligenceforInvestinginHedgeFunds

PrivateEquity

PrivateEquityStructureandFees

PrivateEquityStrategies

PrivateEquity:DiversificationBenefits,Performance,andRisk

PortfolioCompanyValuation

PrivateEquity:InvestmentConsiderationsandDueDiligence

RealEstate

FormsofRealEstateInvestment

RealEstateInvestmentCategories

RealEstatePerformanceandDiversificationBenefits

RealEstateValuation

RealEstateInvestmentRisks

Commodities

CommodityDerivativesandIndexes

OtherCommodityInvestmentVehicles

CommodityPerformanceandDiversificationBenefits

CommodityPricesandInvestments

Infrastructure

CategoriesofInfrastructureInvestments

FormsofInfrastructureInvestments

indicatesanoptionalsegment

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ii

Contents

RiskandReturnOverview

OtherAlternativeInvestments

RiskManagementOverview

InvestmentandRiskManagementProcess

Risk–ReturnMeasures

DueDiligenceOverview

Summary

56

57

57

57

59

60

62

65

70

PracticeProblems

Solutions

PortfolioManagement

StudySession18

Reading51

PortfolioManagement(1)

77

PortfolioManagement:AnOverview

Introduction

79

79

APortfolioApproachtoInvesting

HistoricalExampleofPortfolioDiversification:AvoidingDisaster

Portfolios:ReduceRisk

80

80

82

Portfolios:CompositionMattersfortheRisk–ReturnTrade-off

HistoricalPortfolioExample:NotNecessarilyDownsideProtection

Portfolios:ModernPortfolioTheory

StepsinthePortfolioManagementProcess

StepOne:ThePlanningStep

StepTwo:TheExecutionStep

StepThree:TheFeedbackStep

TypesofInvestors

85

85

88

89

89

90

92

93

IndividualInvestors

93

InstitutionalInvestors

94

TheAssetManagementIndustry

ActiveversusPassiveManagement

TraditionalversusAlternativeAssetManagers

OwnershipStructure

AssetManagementIndustryTrends

MutualFundsandPooledInvestmentProducts

MutualFunds

99

100

101

101

101

104

104

106

107

108

108

109

110

112

114

TypesofMutualFunds

SeparatelyManagedAccounts

Exchange-TradedFunds

HedgeFunds

PrivateEquityandVentureCapitalFunds

Summary

PracticeProblems

Solutions

Reading52

PortfolioRiskandReturn:PartI

Introduction

InvestmentCharacteristicsofAssets

Return

115

115

116

116

indicatesanoptionalsegment

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Contents

iii

OtherMajorReturnMeasuresandtheirApplications

HistoricalReturnandRisk

130

133

137

140

140

141

146

149

149

157

158

163

164

165

166

169

175

177

185

OtherInvestmentCharacteristics

RiskAversionandPortfolioSelection

TheConceptofRiskAversion

UtilityTheoryandIndifferenceCurves

ApplicationofUtilityTheorytoPortfolioSelection

PortfolioRisk

PortfolioofTwoRiskyAssets

PortfolioofManyRiskyAssets

ThePowerofDiversification

EfficientFrontierandInvestor’sOptimalPortfolio

InvestmentOpportunitySet

Minimum-VariancePortfolios

ARisk-FreeAssetandManyRiskyAssets

OptimalInvestorPortfolio

Summary

PracticeProblems

Solutions

Reading53

PortfolioRiskandReturn:PartII

Introduction

CapitalMarketTheory

191

191

192

192

196

204

204

206

213

213

215

217

219

219

220

222

222

223

224

225

228

228

229

230

233

235

241

PortfolioofRisk-FreeandRiskyAssets

TheCapitalMarketLine

PricingofRiskandComputationofExpectedReturn

SystematicRiskandNonsystematicRisk

CalculationandInterpretationofBeta

TheCapitalAssetPricingModel

AssumptionsoftheCAPM

TheSecurityMarketLine

ApplicationsoftheCAPM

BeyondtheCapitalAssetPricingModel

LimitationsoftheCAPM

ExtensionstotheCAPM

PortfolioPerformanceAppraisalMeasures

TheSharpeRatio

TheTreynorRatio

M2:Risk-AdjustedPerformance(RAP)

Jensen’sAlpha

ApplicationsoftheCAPMinPortfolioConstruction

SecurityCharacteristicLine

SecuritySelection

ImplicationsoftheCAPMforPortfolioConstruction

Summary

PracticeProblems

Solutions

indicatesanoptionalsegment

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iv

Contents

StudySession19

Reading54

PortfolioManagement(2)

245

BasicsofPortfolioPlanningandConstruction

Introduction

PortfolioPlanning

247

247

248

248

249

262

265

266

266

274

278

279

280

283

287

TheInvestmentPolicyStatement

MajorComponentsofanIPS

GatheringClientInformation

PortfolioConstruction

CapitalMarketExpectations

TheStrategicAssetAllocation

StepsTowardanActualPortfolio

ESGConsiderationsinPortfolioPlanningandConstruction

AlternativePortfolioOrganizingPrinciples

ConclusionandSummary

PracticeProblems

Solutions

Reading55

IntroductiontoRiskManagement

Introduction

TheRiskManagementProcess

RiskGovernance

289

289

291

299

299

301

303

306

307

308

312

315

316

317

321

329

332

335

AnEnterpriseViewofRiskGovernance

RiskTolerance

RiskBudgeting

IdentificationofRisks

FinancialRisks

Non-FinancialRisks

InteractionsbetweenRisks

MeasuringandModifyingRisks

Drivers

Metrics

MethodsofRiskModification

Summary

PracticeProblems

Solutions

Reading56

TechnicalAnalysis

Introduction

337

337

338

338

340

342

342

353

355

366

384

385

TechnicalAnalysis:DefinitionandScope

PrinciplesandAssumptions

TechnicalandFundamentalAnalysis

TechnicalAnalysisTools

Charts

Trend

ChartPatterns

TechnicalIndicators

Cycles

ElliottWaveTheory

indicatesanoptionalsegment

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Contents

v

IntermarketAnalysis

Summary

PracticeProblems

Solutions

388

390

393

398

Reading57

FintechinInvestmentManagement

Introduction

WhatIsFintech?

401

401

402

403

404

406

406

408

409

409

410

411

411

413

415

415

416

418

BigData

SourcesofBigData

BigDataChallenges

AdvancedAnalyticalTools:ArtificialIntelligenceandMachineLearning

TypesofMachineLearning

DataScience:ExtractingInformationfromBigData

DataProcessingMethods

DataVisualization

SelectedApplicationsofFintechtoInvestmentManagement

TextAnalyticsandNaturalLanguageProcessing

Robo-AdvisoryServices

RiskAnalysis

AlgorithmicTrading

DistributedLedgerTechnology

PermissionedandPermissionlessNetworks

ApplicationsofDistributedLedgerTechnologytoInvestment

Management

418

420

422

424

Summary

PracticeProblems

Solutions

Glossary

G-1

indicatesanoptionalsegment

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vii

HowtoUsetheCFA

ProgramCurriculum

C

ongratulationsonyourdecisiontoentertheCharteredFinancialAnalyst(CFA®)

Program.isexcitingandrewardingprogramofstudyreflectsyourdesiretobecome

aseriousinvestmentprofessional.Youareembarkingonaprogramnotedforitshigh

ethicalstandardsandthebreadthofknowledge,skills,andabilities(competencies)

itdevelops.YourcommitmenttotheCFAProgramshouldbeeducationallyand

professionallyrewarding.

ecredentialyouseekisrespectedaroundtheworldasamarkofaccomplish-

mentanddedication.Eachleveloftheprogramrepresentsadistinctachievementin

professionaldevelopment.Successfulcompletionoftheprogramisrewardedwith

membershipinaprestigiousglobalcommunityofinvestmentprofessionals.CFA

charterholdersarededicatedtolife-longlearningandmaintainingcurrencywiththe

ever-changingdynamicsofachallengingprofession.eCFAProgramrepresentsthe

firststeptowardacareer-longcommitmenttoprofessionaleducation.

eCFAexaminationmeasuresyourmasteryofthecoreknowledge,skills,and

abilitiesrequiredtosucceedasaninvestmentprofessional.esecorecompetencies

arethebasisfortheCandidateBodyofKnowledge(CBOK™).eCBOKconsistsof

fourcomponents:

AbroadoutlinethatliststhemajortopicareascoveredintheCFAProgram

(/programs/cfa/curriculum/cbok);

■■

Topicareaweightsthatindicatetherelativeexamweightingsofthetop-level

topicareas(/programs/cfa/curriculum/overview);

■■

Learningoutcomestatements(LOS)thatadvisecandidatesaboutthespecific

■■

knowledge,skills,andabilitiestheyshouldacquirefromreadingscoveringa

topicarea(LOSareprovidedincandidatestudysessionsandatthebeginning

ofeachreading);and

eCFAProgramcurriculumthatcandidatesreceiveuponexamination

registration.

■■

erefore,thekeytoyoursuccessontheCFAexaminationsisstudyingandunder-

standingtheCBOK.efollowingsectionsprovidebackgroundontheCBOK,the

organizationofthecurriculum,featuresofthecurriculum,andtipsfordesigningan

effectivepersonalstudyprogram.

BACKGROUNDONTHECBOK

eCFAProgramisgroundedinthepracticeoftheinvestmentprofession.Beginning

withtheGlobalBodyofInvestmentKnowledge(GBIK),CFAInstituteperformsa

continuouspracticeanalysiswithinvestmentprofessionalsaroundtheworldtodeter-

minethecompetenciesthatarerelevanttotheprofession.Regionalexpertpanelsand

targetedsurveysareconductedannuallytoverifyandreinforcethecontinuousfeed-

backabouttheGBIK.epracticeanalysisprocessultimatelydefinestheCBOK.e

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HowtoUsetheCFAProgramCurriculum

viii

CBOKreflectsthecompetenciesthataregenerallyacceptedandappliedbyinvestment

professionals.esecompetenciesareusedinpracticeinageneralistcontextandare

expectedtobedemonstratedbyarecentlyqualifiedCFAcharterholder.

eCFAInstitutestaff,inconjunctionwiththeEducationAdvisoryCommittee

andCurriculumLevelAdvisors,whoconsistofpracticingCFAcharterholders,

designstheCFAProgramcurriculuminordertodelivertheCBOKtocandidates.

eexaminations,alsowrittenbyCFAcharterholders,aredesignedtoallowyouto

demonstrateyourmasteryoftheCBOKassetforthintheCFAProgramcurriculum.

Asyoustructureyourpersonalstudyprogram,youshouldemphasizemasteryofthe

CBOKandthepracticalapplicationofthatknowledge.Formoreinformationonthe

practiceanalysis,CBOK,anddevelopmentoftheCFAProgramcurriculum,please

visit.

ORGANIZATIONOFTHECURRICULUM

eLevelICFAProgramcurriculumisorganizedinto10topicareas.Eachtopicarea

beginswithabriefstatementofthematerialandthedepthofknowledgeexpected.It

isthendividedintooneormorestudysessions.esestudysessions—19sessionsin

theLevelIcurriculum—shouldformthebasicstructureofyourreadingandprepa-

ration.Eachstudysessionincludesastatementofitsstructureandobjectiveandis

furtherdividedintoassignedreadings.Anoutlineillustratingtheorganizationof

these19studysessionscanbefoundatthefrontofeachvolumeofthecurriculum.

ereadingsarecommissionedbyCFAInstituteandwrittenbycontentexperts,

includinginvestmentprofessionalsanduniversityprofessors.Eachreadingincludes

LOSandthecorematerialtobestudied,oftenacombinationoftext,exhibits,and

in-textexamplesandquestions.Areadingtypicallyendswithpracticeproblemsfol-

lowedbysolutionstotheseproblemstohelpyouunderstandandmasterthematerial.

eLOSindicatewhatyoushouldbeabletoaccomplishafterstudyingthematerial.

eLOS,thecorematerial,andthepracticeproblemsaredependentoneachother,

withthecorematerialandthepracticeproblemsprovidingcontextforunderstanding

thescopeoftheLOSandenablingyoutoapplyaprincipleorconceptinavariety

ofscenarios.

eentirereadings,includingthepracticeproblemsattheendofthereadings,are

thebasisforallexaminationquestionsandareselectedordevelopedspecificallyto

teachtheknowledge,skills,andabilitiesreflectedintheCBOK.

YoushouldusetheLOStoguideandfocusyourstudybecauseeachexamination

questionisbasedononeormoreLOSandthecorematerialandpracticeproblems

associatedwiththeLOS.Asacandidate,youareresponsiblefortheentiretyofthe

requiredmaterialinastudysession.

WeencourageyoutoreviewtheinformationabouttheLOSonourwebsite(www.

/programs/cfa/curriculum/study-sessions),includingthedescriptions

ofLOS“commandwords”onthecandidateresourcespageat.

FEATURESOFTHECURRICULUM

OPTIONAL

SEGMENT

Requiredvs.OptionalSegmentsYoushouldreadallofanassignedreading.Insome

cases,though,wehavereprintedanentirepublicationandmarkedcertainpartsofthe

readingas“optional.”eCFAexaminationisbasedonlyontherequiredsegments,

andtheoptionalsegmentsareincludedonlywhenitisdeterminedthattheymight

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HowtoUsetheCFAProgramCurriculum

ix

helpyoutobetterunderstandtherequiredsegments(byseeingtherequiredmaterial

initsfullcontext).Whenanoptionalsegmentbegins,youwillseeaniconandadashed

verticalbarintheoutsidemarginthatwillcontinueuntiltheoptionalsegmentends,

accompaniedbyanothericon.Unlessthematerialisspecificallymarkedasoptional,

youshouldassumeitisrequired.Youshouldrelyontherequiredsegmentsandthe

reading-specificLOSinpreparingfortheexamination.

ENDOPTIONAL

SEGMENT

PracticeProblems/SolutionsAllpracticeproblemsattheendofthereadingsaswellas

theirsolutionsarepartofthecurriculumandarerequiredmaterialfortheexamination.

Inadditiontothein-textexamplesandquestions,thesepracticeproblemsshouldhelp

demonstratepracticalapplicationsandreinforceyourunderstandingoftheconcepts

presented.SomeofthesepracticeproblemsareadaptedfrompastCFAexaminations

and/ormayserveasabasisforexaminationquestions.

GlossaryForyourconvenience,eachvolumeincludesacomprehensiveglossary.

roughoutthecurriculum,aboldedwordinareadingdenotesatermdefinedin

theglossary.

Notethatthedigitalcurriculumthatisincludedinyourexaminationregistration

feeissearchableforkeywords,includingglossaryterms.

LOSSelf-CheckWehaveinsertedcheckboxesnexttoeachLOSthatyoucanuseto

trackyourprogressinmasteringtheconceptsineachreading.

SourceMaterialeCFAInstitutecurriculumcitestextbooks,journalarticles,and

otherpublicationsthatprovideadditionalcontextorinformationabouttopicscovered

inthereadings.Asacandidate,youarenotresponsibleforfamiliaritywiththeoriginal

sourcematerialscitedinthecurriculum.

NotethatsomereadingsmaycontainawebaddressorURL.ereferencedsites

wereliveatthetimethereadingwaswrittenorupdatedbutmayhavebeendeacti-

vatedsincethen.

SomereadingsinthecurriculumcitearticlespublishedintheFinancialAnalystsJournal®,

whichistheflagshippublicationofCFAInstitute.Sinceitslaunchin1945,theFinancial

AnalystsJournalhasestablisheditselfastheleadingpractitioner-orientedjournalinthe

investmentmanagementcommunity.Overtheyears,ithasadvancedtheknowledgeand

understandingofthepracticeofinvestmentmanagementthroughthepublicationof

peer-reviewedpractitioner-relevantresearchfromleadingacademicsandpractitioners.

Ithasalsofeaturedthought-provokingopinionpiecesthatadvancethecommonlevelof

discoursewithintheinvestmentmanagementprofession.Someofthemostinfluential

researchintheareaofinvestmentmanagementhasappearedinthepagesoftheFinancial

AnalystsJournal,andseveralNobellaureateshavecontributedarticles.

CandidatesarenotresponsibleforfamiliaritywithFinancialAnalystsJournalarticles

thatarecitedinthecurriculum.But,asyourtimeandstudiesallow,westronglyencour-

ageyoutobeginsupplementingyourunderstandingofkeyinvestmentmanagement

issuesbyreadingthispractice-orientedpublication.Candidateshavefullonlineaccess

totheFinancialAnalystsJournalandassociatedresources.Allyouneedistologinon

usingyourcandidatecredentials.

Errataecurriculumdevelopmentprocessisrigorousandincludesmultiplerounds

ofreviewsbycontentexperts.Despiteoureffortstoproduceacurriculumthatisfree

oferrors,therearetimeswhenwemustmakecorrections.Curriculumerrataareperi-

odicallyupdatedandpostedonthecandidateresourcespageat.

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HowtoUsetheCFAProgramCurriculum

x

DESIGNINGYOURPERSONALSTUDYPROGRAM

CreateaScheduleAnorderly,systematicapproachtoexaminationpreparationis

critical.Youshoulddedicateaconsistentblockoftimeeveryweektoreadingand

studying.Completeallassignedreadingsandtheassociatedproblemsandsolutions

ineachstudysession.ReviewtheLOSbothbeforeandafteryoustudyeachreading

toensurethatyouhavemasteredtheapplicablecontentandcandemonstratethe

knowledge,skills,andabilitiesdescribedbytheLOSandtheassignedreading.Usethe

LOSself-checktotrackyourprogressandhighlightareasofweaknessforlaterreview.

Successfulcandidatesreportanaverageofmorethan300hourspreparingfor

eachexamination.Yourpreparationtimewillvarybasedonyourprioreducationand

experience,andyouwillprobablyspendmoretimeonsomestudysessionsthanon

others.AstheLevelIcurriculumincludes19studysessions,agoodplanistodevote

15−20hoursperweekfor19weekstostudyingthematerialandusethefinalfourto

sixweeksbeforetheexaminationtoreviewwhatyouhavelearnedandpracticewith

practicequestionsandmockexaminations.isrecommendation,however,may

underestimatethehoursneededforappropriateexaminationpreparationdepending

onyourindividualcircumstances,relevantexperience,andacademicbackground.

Youwillundoubtedlyadjustyourstudytimetoconformtoyourownstrengthsand

weaknessesandtoyoureducationalandprofessionalbackground.

Youshouldallowampletimeforbothin-depthstudyofalltopicareasandaddi-

tionalconcentrationonthosetopicareasforwhichyoufeeltheleastprepared.

Aspartofthesupplementalstudytoolsthatareincludedinyourexamination

registrationfee,youhaveaccesstoastudyplannertohelpyouplanyourstudytime.

estudyplannercalculatesyourstudyprogressandpacebasedonthetimeremaining

untilexamination.Formoreinformationonthestudyplannerandothersupplemental

studytools,pleasevisit.

Asyouprepareforyourexamination,wewille-mailyouimportantexamination

updates,testingpolicies,andstudytips.Besuretoreadthesecarefully.

CFAInstitutePracticeQuestionsYourexaminationregistrationfeeincludesdigital

accesstohundredsofpracticequestionsthatareadditionaltothepracticeproblems

attheendofthereadings.esepracticequestionsareintendedtohelpyouassess

yourmasteryofindividualtopicareasasyouprogressthroughyourstudies.Aftereach

practicequestion,youwillbeabletoreceiveimmediatefeedbacknotingthecorrect

responsesandindicatingtherelevantassignedreadingsoyoucanidentifyareasof

weaknessforfurtherstudy.Formoreinformationonthepracticequestions,please

visit.

CFAInstituteMockExaminationsYourexaminationregistrationfeealsoincludes

digitalaccesstothree-hourmockexaminationsthatsimulatethemorningandafter-

noonsessionsoftheactualCFAexamination.esemockexaminationsareintended

tobetakenafteryoucompleteyourstudyofthefullcurriculumandtakepractice

questionssoyoucantestyourunderstandingofthecurriculumandyourreadiness

fortheexamination.Youwillreceivefeedbackattheendofthemockexamination,

notingthecorrectresponsesandindicatingtherelevantassignedreadingssoyoucan

assessareasofweaknessforfurtherstudyduringyourreviewperiod.Werecommend

thatyoutakemockexaminationsduringthefinalstagesofyourpreparationforthe

actualCFAexamination.Formoreinformationonthemockexaminations,pleasevisit

.

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HowtoUsetheCFAProgramCurriculum

xi

PreparatoryProvidersAfteryouenrollintheCFAProgram,youmayreceivenumer-

oussolicitationsforpreparatorycoursesandreviewmaterials.Whenconsideringa

preparatorycourse,makesuretheproviderbelongstotheCFAInstituteApprovedPrep

ProviderProgram.ApprovedPrepProvidershavecommittedtofollowCFAInstitute

guidelinesandhighstandardsintheirofferingsandcommunicationswithcandidates.

FormoreinformationontheApprovedPrepProviders,pleasevisitwww.cfainstitute.

org/programs/cfa/exam/prep-providers.

Remember,however,thattherearenoshortcutstosuccessontheCFAexamina-

tions;readingandstudyingtheCFAcurriculumisthekeytosuccessontheexamina-

tion.eCFAexaminationsreferenceonlytheCFAInstituteassignedcurriculum—no

preparatorycourseorreviewcoursematerialsareconsultedorreferenced.

SUMMARY

EveryquestionontheCFAexaminationisbasedonthecontentcontainedintherequired

readingsandononeormoreLOS.Frequently,anexaminationquestionisbasedona

specificexamplehighlightedwithinareadingoronaspecificpracticeproblemandits

solution.TomakeeffectiveuseoftheCFAProgramcurriculum,pleaserememberthese

keypoints:

1

Allpagesofthecurriculumarerequiredreadingfortheexaminationexceptfor

occasionalsectionsmarkedasoptional.Youmayreadoptionalpagesasback-

ground,butyouwillnotbetestedonthem.

2

3

Allquestions,problems,andtheirsolutions—foundattheendofreadings—are

partofthecurriculumandarerequiredstudymaterialfortheexamination.

Youshouldmakeappropriateuseofthepracticequestionsandmockexamina-

tionsaswellasothersupplementalstudytoolsandcandidateresourcesavailable

at.

4

5

Createascheduleandcommitsufficientstudytimetocoverthe19studysessions,

usingthestudyplanner.Youshouldalsoplantoreviewthematerialsandtake

practicequestionsandmockexaminations.

Someoftheconceptsinthestudysessionsmaybesupersededbyupdated

rulingsand/orpronouncementsissuedafterareadingwaspublished.Candidates

areexpectedtobefamiliarwiththeoverallanalyticalframeworkcontainedinthe

assignedreadings.Candidatesarenotresponsibleforchangesthatoccurafterthe

materialwaswritten.

FEEDBACK

AtCFAInstitute,wearecommittedtodeliveringacomprehensiveandrigorouscurric-

ulumforthedevelopmentofcompetent,ethicallygroundedinvestmentprofessionals.

Werelyoncandidateandinvestmentprofessionalcommentsandfeedbackaswe

worktoimprovethecurriculum,supplementalstudytools,andcandidateresources.

Pleasesendanycommentsorfeedbacktoinfo@.Youcanbe

assuredthatwewillreviewyoursuggestionscarefully.Ongoingimprovementsinthe

curriculumwillhelpyouprepareforsuccessontheupcomingexaminationsandfor

alifetimeoflearningasaseriousinvestmentprofessional.

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AlternativeInvestments

StudySession17

AlternativeInvestments

ecandidateshouldbeabletodemonstrateaworkingknowledgeofalternative

investments,includinghedgefunds,privateequity,realestate,commodities,and

infrastructure.ecandidateshouldbeabletodescribekeyattributesandconsider-

ationsinaddingtheseinvestmentstoaportfolio.

Investorsoftenturntoalternativeinvestmentsforpotentialdiversificationbenefits

andhigherreturns.Asaresult,alternativeinvestmentsnowrepresentmeaningful

allocationsinmanyinstitutionalandprivatewealthportfolios.Althoughthecategory

of“alternativeinvestments”isnotalwaysclearlyorpreciselydefined,alternative

investmentsoftenhaveanumberofcharacteristicsincommon.eseincludelower

levelsofliquidity,transparency,anddisclosurevs.traditionalassetclasses(equity,

fixedincome),morecomplexlegalstructures,andperformance-basedcompensation

arrangements.

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ALTERNATIVEINVESTMENTS

17

STUDYSESSION

AlternativeInvestments

T

hisstudysessionprovidesanoverviewofthemorewidelyusedalternativeinvest-

ments,includinghedgefunds,