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Alternative investing program targets advisers looking to diversify

Timing of new certification training couldn't be better with stocks at highs and rates set to climb

Mar 13, 2014 @ 9:15 am

By Jeff Benjamin

alternative investments, designations
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Tapping into the growing popularity of alternative investment strategies, two industry associations have joined forces to offer an online educational program and certificate that demonstrates continuing education in alternative portfolio strategies.

The Investment Management Consultants Association and the Chartered Alternative Investment Analyst Association Thursday announced the launch of the Fundamentals of Alternative Investments Certificate program.

While it could easily be argued that another certification is the last thing the financial advice industry needs, this one might be just the right one at the right time.

With the stock market at all-time highs and the bond market precariously poised for a rising rate cycle, the case for alternative strategies inside traditional portfolios seems to get stronger with each passing day.

CAIA Association chief executive William Kelly pointed out that not only has the need for alternatives been increasing, but the lineup of products and strategies has been evolving and getting more complex.

“The landscape for alternatives has changed dramatically, and it is imperative that the professionals charged with managing, analyzing, distributing and regulating these products keep pace with a focus that has knowledge and education as its central tenet,” he said. “The fundamentals program is meant to be an answer to the continued quest for this knowledge coming from so many newer and more retail-oriented intermediaries and end clients.”

The growing complexity of the alternatives universe is illustrated in the rapid growth of the so-called liquid alternatives universe.

Morningstar Inc. counts 429 distinct open-end mutual funds in the alternatives space, representing nearly $145 billion in assets, including more than $8.5 billion in net inflows since the start of the year.

There were 70 new alternative-strategy funds added to the universe last year.

For comparison, consider that in 2004, there were 116 alternative-strategy funds, representing $22 billion.

“Alternative investments are going mainstream, and educated investment advisers are critical to ensuring that these products are properly employed in sound investment portfolios,” said Sean Walters, IMCA's executive director and CEO.

“Earning the [certificate] demonstrates a strong understanding of alternative investing and will give advisers greater confidence in positioning alternatives in portfolios,” he added.

The program is a 20-hour self-paced online course that covers portfolio construction, risk management, hedge funds, real assets, private equity, commodities and structured products.

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