You are on the Investment solutions website for advisors & wealth management firms.
Browse more Fidelity websites here.
Investing Ideas
Evaluating alternatives in multi-asset class portfolios
Fidelity Institutional Wealth Adviser (FIWA) explores the structural differences between alternative and traditional asset classes, highlighting the critical importance of manager research for alternative strategies.
Key Takeaways
- Advisors and home-office CIOs have been increasingly focusing on alternative investments for client portfolios, with their interest driven by technological enhancements making it easier to invest; the growth of strategies that offer access to alternatives with a degree of liquidity to investors of all types; and significant demand from investors for more creative solutions to help them address increasingly challenging investment problems.
- In addition, increased data availability on alternative investments is enabling more analysis that may build confidence in their utilization for newer allocators; but alternative investments entail many complexities and idiosyncratic risks, resulting in higher dispersion among top- and bottom-performing managers and requiring a rigorous due diligence process.
- FIWA proprietary research comparing return dispersion between traditional and alternative asset class funds underscores the importance of due diligence when investing in alternative investments, while also highlighting the benefits of diversification.
- The foundations of a due diligence process for alternative strategies encompass many facets, including analysis of the people managing the strategy, the firm behind them, their overall investment philosophy and process, and the alignment of the portfolio with the stated strategy over time. The terms and fees of the product, performance, and the overall governance of the firm and its funds are also key. But execution of this process is nuanced, requiring unique expertise.
Get the full white paper
Evaluating alternatives in multi-asset class portfolios
Next steps to consider
Alternative Investments
Discover new investment opportunities in the alternatives space than may help give your business an edge.
Learn more
Digital Assets
Get ready to meet the rising demand of digital assets and cryptocurrency with our exclusive insights, resources, and investment offerings.
Learn more
Portfolio Construction Solutions
Get ready to manage your client portfolios—and relationships—more effectively with Fidelity's powerful portfolio construction insights, tools, and solutions.
Learn more
Alternative investment strategies may not be suitable for all investors and are not intended to be a complete investment program. Alternatives may be relatively illiquid; it may be difficult to determine the current market value of the asset; and there may be limited historical risk and return data. Costs of purchase and sale may be relatively high. A high degree of investment analysis may be required before investing.
Diversification and asset allocation do not ensure a profit or guarantee against loss.
Fidelity Institutional Wealth Adviser LLC (“FIWA”) is a registered investment adviser and an indirect, wholly owned subsidiary of FMR LLC. FIWA is the sponsor of the Fidelity Managed Account XchangeSM program (“FMAX” or the “Platform”).
1136649.1
EC487F8607E14C1796D46F78CE0551F7