To handle these challenges, traders face a normal menu of choices (Exhibit 1). To enhance the tradeoff between threat and return in portfolios, they will reallocate to asset lessons offering higher risk-adjusted returns, decrease correlations, or a little bit of each. In recent times, for instance, sure traders have elevated their allocations to options, together with illiquid non-public belongings like non-public fairness and actual property. Though this has been a profitable method, these kind of autos usually are not accessible to many particular person traders.
