podcast link including transcript: https://investresolve.com/podcasts/how-to-think-about-your-alternative-sleeve-in-the-context-of-getting-the-most-bang-for-your-buck-podcast/

Key Takeaways

• Alternative premia need to be vol efficient; this may require leverage
• Alternative premia need to be fee efficient. “bang for your buck” thinking

Professional and future investors understand these concepts. They often prefer the 20 or 25% vol version of alt premia strategies rather than the 10% vol version. This allows them to make a smaller allocation to the strategy for the same exposure. Fee efficiency!

The more you allocate to one strategy the less you have to allocate to other forms of premia, so being fee and vol efficient is important.

Ask yourself:

1. What’s the value you are getting for the fee?
2. What’s the expected return you are getting for the volatility?