Fund managers need to improve communication
Fund managers in alternative investments such as macro strategies need to improve their communication with nervous investors to help them understand how alternative investments works, according to Joe Bracken, the head of macro strategies at BT Investment Management.
Alternative investments are a complicated investment strategy to understand, and with increasing amounts of funds being invested in alternatives to diversify risk, fund managers need to clearly explain to wary investors how the funds operate.
The total proportion of investor funds being put in to alternative investments has gone up to nearly 30 per cent in some cases during the current market turmoil, Bracken said.
Fund management companies should investigate sending their fund managers on communication courses if they can’t clearly explain their investment strategy to investors, Bracken said.
In times when the markets were good, fund managers didn’t need to explain how certain investments worked, and that was accepted by investors.
Investors fear what they don’t know, and if fund managers can’t explain it to the investor, that creates a problem for the fund, Bracken said.
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