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GMO Quarterly Report


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In one of GMO's newer quarterly reports, they discuss what they see as the advantage of alternative assets.  From what I understand they are referring to hedge funds.  My question is, what are the better etf options for investing in alternative assets, if any?  Is there anything remotely equivalent to berkshire/fairfax, or markel, or even leucadia?


The charm of alternatives today is that we believe they should perform similarly in either the

temporary or permanent shift scenario, and there are almost no other assets with expected returns

above cash for which that is the case. The problem with alternatives is that they are more complicated

to manage than traditional assets, generally have higher fees associated with them, and require more

oversight. Normally, those problems are enough to make them less appealing than traditional risk

assets such as equities and credit. Today, however, they seem well worth the extra effort. Their

generally disappointing performance over recent years, rather than a sign to dump them once and for

all, should probably be recognized as a signal of their potential utility in the market environment we

face in the coming years.



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