2026 MIC – Liquid Alts Are the Asset Class You Hate Until You Need It

The 2026 Morningstar Investment Conference brought together a panel titled “Liquid Alternatives: The Asset Class You Hate Until You Need It.” David Reyna, CFA, Senior Analyst for Multi-Asset and Alternative Strategies at Morningstar, moderated. The panelists were Catherine LeGraw, Portfolio Strategist and Partner on GMO’s Asset Allocation team; Dr. Ranjan Bhaduri, Founder and CEO of Bodhi Research Group, an independent research and education firm focused on alternative investments; and Brian Portnoy, PhD, CFA, Founder and CEO of Shaping Wealth and author of The Geometry of Wealth. Their central argument matched the title: liquid alternatives tend to frustrate investors during calm markets, but that frustration dissolves when equities fall, bonds stop diversifying, and cash becomes the only refuge.

The Panel Title Says It All

Reyna opened by asking each panelist to react to the session’s framing. The responses came from meaningfully different angles.

Bhaduri reached for a sports analogy. A football team made up entirely of quarterbacks cannot win, he argued, you need the full roster. The same logic applies to portfolio construction at every level of sophistication. Liquid alternatives are not an optional add-on but a core component of any serious portfolio, and limiting a portfolio to stocks and bonds alone is the equivalent of fielding an incomplete team.