By continuing on this site you have agreed to cookies being placed and accessed by this website. More information and adjusting cookie settings.
’There’s little or no empirical evidence for a yield differential between liquid and illiquid asset classes’“On theoretical grounds, you might expect there to be some kind of liquidity premium,” says Markwat. “But the results of academic research are mixed. Within some asset classes, illiquid investments offer better yields than liquid investments do. So a liquidity premium exists in such cases. But there’s little or no empirical evidence for a yield differential between liquid and illiquid asset classes. You can’t say that there’s no liquidity premium between asset classes, but it is certainly very difficult to demonstrate that it exists.”
You should invest in illiquid asset classes for the alpha, rather than for the risk premium’Are illiquid assets actually attractive enough to invest in?
‘Liquidity premiums are higher in times of crisis’Liquidity premiums are higher than usual in times of crisis. Can investors benefit from this?
Sign up for our email newsletter to receive updates and to stay informed about upcoming webinars.