The Alternative Investment Management Association (AIMA) and Chartered Investment Analyst Association (CAIA) have released an updated risk rating system for alternative funds in Canada, according to a report by AIMA. This system is expected to be a guideline for better assessing risk at investment-dealer firms with risk-adjusted returns.
This updated system includes alternative asset classes, including private equity and real assets. This change will enhance investors’ access to strategies that provide diversification and risk reduction across markets.
This risk rating guideline is expected to act as a crucial reference point for investment dealers, because most non-prospectus public and private alternative funds in Canada are typically immediately classified as high risk, regardless of the actual metrics of the strategy, according to AIMA.
