iShares Diversified Alternatives Trust (ALT) is traded on the New York Stock Exchange. BlackRock Asset Management International Inc. is the sole manager of ALT, which is registered as a commodity pool and not as an investment management company.
ALT seeks to act as a hedge fund, focusing on three main area - interest rates, foreign currencies and equities. As of December 31, 2011, it had assets of $90,763,622. Its assets consist as follows:
|Held by Brokers||$1,401,234|
|Unrealized Appreciation on Forward Currency Contracts||$3,723,647|
|Unrealized Depreciation on Futures Contracts||($152,172)|
Liabilities were simple and as follows:
|Due to Brokers||$100,000|
|Unrealized Depreciation on Forward Currency Contracts||$2,695,336|
ALT was launched on October 6, 2009. Net gain and loss and net asset value changes have been as follows:
|Gain and Loss||Net Asset value Per Share|
The portfolio is diverse and interesting. Currency speculation is primarily with larger currencies such as the Canadian dollar, Australian dollar, Swiss franc, euro/dollar, British pound, Japanese yen, Norwegian krona and Swedish krona. Alt does not seem to be involved with the currencies of developing countries. ALT has long and short positions.
Equity Contracts are also widely diversified. in such Indexes as the AEX, CAC 40, OMX 30, Hang Seng, MSCI Taiwan, TOPIX, TSX, SPI 200, DAX, FTSE 100 and S&P 500. ALT has long and short positions.
Their Interest Rate Strategy is also widely diversified being in 10 Year JGB, Euro Bund, Japan 10 Year Bond, Australian 10 Year Bond, Canada 10 Year Bond, U.S. 10 Year Bond and Long Gilt. ALT has long and short positions.
Expenses are relatively low, and ratios for the past 3 years on relevant criteria are as follows:
|Net Investment Loss||(0.92%)||(0.84%)||(0.92%)|
BlackRock is a large, legitimate fund manager. I know that everyone is seeking to add asset classes to their portfolio for diversification. I am not a fan of hedge funds in general. It is hard enough to make investment decisions every so often, and I suspect to is even harder to come up with new investment ideas every day. I see no harm in owning ALT, and it may work out. It does seem that they maintain much discipline and control and have limited losses.
Disclosure: I am long ALT.