Time to Reconsider Alternatives: Resilience in a Shifting Market

In its September 2025 Alternative Insights, GMO argues for a renewed look at liquid alternatives amid valuation dislocations and elevated real rates.

• Liquid alternatives offer diversification and attractive expected returns without the opaque structures and high fees of traditional hedge funds.

• GMO’s Alternative Allocation Strategy (ALTA) seeks equity-like returns with prudent risk management, leveraging strategies such as equity dislocation, event-driven, and EM currency.

• Dynamic allocation and capital-efficient overlays enhance resilience, with historically low correlations to equities and bonds providing crisis protection.

Could liquid alternatives play a larger role in portfolios as traditional stock-bond diversification weakens? Explore the full report for insights.