Investment Characteristics of Emotional Assets

As an asset class, Emotional Assets share very interesting and unique investment characteristics:

  • They share a unique risk/return profile
  • With a few exceptions, they move independently of one another
  • This low correlation can be used as an effective risk management tool in a portfolio
  • They all have an exotic beta profile due to the non-linearity of their price movement
  • They provide structural alpha opportunities due to the absence of published research
  • When combined in a portfolio, Emotional Assets exhibit highly favourable return to risk ratios – High Sharpe Ratios
  • As tangible assets, Emotional Assets exhibit good inflation hedging properties
  • Emotional Assets are not dependent on leverage and gearing to generate attractive returns
  • Emotional Assets have no intrinsic credit risk
  • The pricing and valuation of Emotional Assets are not dependent on complex mathematical pricing models 
Asset Classes
 

 

 

 

 

Although there has historically been a demand for Emotional Assets that exceeds supply, causing substantial increases in value, there is no guarantee that this will be the case in the future. Demand for Emotional Assets of a particular area, issue or type may be affected by regional or world trends and tastes.
 


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