Bull vs Bear: Do Alts Still Have a Place in 2024?

Bull vs. Bear is a weekly feature where the VettaFi writers’ room takes opposite sides to debate controversial stocks, strategies, or market ideas — with plenty of discussion of ETF ideas to play either angle. For this edition of Bull vs. Bear, Karrie Gordon and Nick Peters-Golden debate whether alternatives, commonly referred to as alts, deserve portfolio allocation in 2024.

Karrie Gordon, staff writer, VettaFi: Hey Nick, I look forward to discussing alternatives with you today. It’s an arena of investing I find particularly fascinating and where a lot of innovation is happening on the ETF side. While I’m a firm believer that alts deserve a permanent place in portfolios, this year, in particular, warrants intentional inclusion of alts strategies.

Nick Peters-Golden, staff writer, VettaFi: Hi Karrie, likewise! I like alts as much as the next person, but there’s a time and place for anything. Right now, I think the place to be is finding innovation in the 60/40. We’ll see what the readers think!

Diversification Still Matters in 2024

Gordon: Alts gained significant attention in the last few years as stock and bond correlations rose, and for good reason! Correlations are the enemy of the 60/40 portfolio. When stocks and bonds move in tandem, the historic equity hedge that bonds provide collapses.

Enter alternatives with their diversified return streams. Alt strategies are enormously varied but exhibit a level of fundamentals that differ from stocks and bonds. A great example of this is if we look at the most talked about alt this year, bitcoin.