Yet some market participants are convinced the Federal Reserve’s fight against inflation will keep markets volatile and are allocating funds to so-called alternative investments. Those types of returns are not typical, however, and the performance of CTAs has been more muted in less volatile markets. Private markets raised $216.9 billion in 2022, putting assets at $1.4 trillion as at June 2022, from $311 billion in 2010, according to data provider Preqin. A 2023 study from State Street found that 68% of investors plan to increase their allocation to private markets in the next two to three years. "In that environment, stocks and bonds are likely to be more correlated."

---