Alternative ways to achieve returns

April 2015

Since 2009, the financial markets have been dominated by high returns on almost all asset classes, and we are currently in a situation characterised by record-low interest rates, significantly narrowed credit spreads and higher equity pricing. This is a challenge to future returns on the traditional asset classes, not least interest-bearing assets. Concurrently, the volatility level in the financial markets has been at a historical low for quite some time, yet with a steeply rising trend over the past six to eight months.

Uncertainty about the generation of returns coupled with a risk that volatility in the financial markets will revert more permanently to former levels give rise to renewed focus on alternative ways to achieve returns. Whereas interest in alternative investment primarily used to be related to expectations of high returns, focus is now very much on the wish for absolute returns which are ideally generated independently of market trends.