Fidelity Alternative Investments Beyond the Traditional
Liquid alternatives include a broad range of strategies across asset classes and investment styles. These funds can fulfill a variety of roles in investor portfolios, offering opportunities for return enhancement, diversification* or downside protection.
For investors looking for diversification beyond traditional asset allocation
Most traditional mutual fund strategies invest with the expectation to hold securities over the long term, while alternative strategies typically invest in public markets or in derivatives tied to performance of those markets. Liquid alternatives usually have the flexibility to take either long or short positions; the latter seeking to benefit from declining asset values. As a result, liquid alternatives may have different risk/return profiles than traditional investments, with varying levels of exposure to the public markets, as well as a range of systematic and idiosyncratic risks.
Strive to deliver favorable risk adjusted return regardless of market cycles and shorter term dynamics.
Strive to provide low correlation to traditional investments such as stock and bonds.
Strive to provide defensive portfolio characteristics relative to equity dominated portfolios, potentially hedging downside risk.
Why a liquid structure?
Liquid alternatives provide an easily accessed investment structure—mutual funds and exchange-traded funds (ETFs)—while also providing daily pricing and liquidity, which makes them more attractive to a broader spectrum of investors.
Alternative funds seek to accomplish the fund's objectives through non-traditional investment strategies that offer exposure beyond traditional stocks, bonds, and cash. Alternative funds may not perform as intended in various market conditions or market scenarios. There can be no assurance that an alternative fund's stated objectives will be met.
Hedge-fund-like strategies are non-traditional investment strategies that use a range of different approaches to managing investments, many with the goal of generating returns that are uncorrelated to traditional asset markets. Or they may have different risk profiles than traditional investment strategies.
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Roles in Multi-Asset Class Portfolios
Many investors look to alternatives to broaden the investment opportunity set and help enhance a portfolio’s returns, manage downside risk, and improve diversification.
Explore how our alternative investment solutions can offer a wider range of investment opportunities for your clients beyond traditional stocks and bonds.