liangfeng

just found this, maybe this helps:

RETURN ENHANCEMENT AND DIVERSIFICATION

Real estate. High risk-adjusted performance is possible because ofthe low liquidity, large sizes, high transactions costs, and low information transparency that usually means the seller knows more than the buyer. Real estate provides great diversification potential.

Private equity is less of a diveI;sifier and more a long-term return enhancer.

Commodities offer diversification to a portfolio ofstocks and bonds. The returns on commodities are generally lower than stocks and bonds.

Hedge funds generated higher returns than stocks and bonds over the period 1990-2004 and generally provide moderate to good diversification benefits.

Managed futures provide returns similar to that ofhedge funds and can provide
diversification.

Distressed securities have generally beaten stocks and bonds but have a large negative skew and are uncorrelated with the overall stock market.