Fidelity Alternative Investments Beyond the Traditional
Liquid Alternatives
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 potential opportunities for return enhancement, diversification* or downside protection.
For investors looking for diversification beyond traditional asset allocation
Liquid alternative strategies typically invest in public markets such as equities, fixed income, commodities and currencies, or in derivatives tied to the performance of those markets. Unlike traditional "buy and hold" strategies, liquid alternatives usually have the flexibility to take both long and 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 systemic and idiosyncratic risks.
Enhancing Returns
Strive to deliver favorable risk adjusted return regardless of market cycles and shorter term dynamics.
Diversifying
Strive to provide low correlation to traditional investments such as stocks and bonds.
Defending
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.
Fidelity offers liquid alternatives to help meet a variety of different portfolio goals.
- ETFs
- Mutual Funds
Fidelity Multi-Strategy Credit Fund
FA Equity Market Neutral Fund
FA Gold Fund
FA Global Commodity Stock Fund
FA Global Real Estate Fund
FA International Real Estate Fund
FA Real Estate Fund
FA Real Estate Income Fund
FA Strategic Real Return Fund
FA Hedged Equity Fund
FA Macro Opportunities Fund*
FA Risk Parity Fund*
* Commodity interest trading involves substantial risk of loss. Past performance is not indicative of future results.
Fidelity Hedged Equity ETF and Fidelity Dynamic Buffered Equity ETF: The funds may purchase or write put and call options. The notional downside protection offered by the option may be less or greater than the value of the Fund's portfolio. Options may involve economic leverage, which could result in greater volatility in price movement. Certain transaction costs associated with purchasing and writing options may impact the Fund's returns and in highly volatile markets the cost is expected to increase. An ETF may trade at a premium or discount to its Net Asset Value (NAV). These alternative investment strategies may not be suitable for all investors and are not intended to be a complete investment program for any investor. There is no assurance that the ETFs will be profitable.
Fidelity Yield Enhanced Equity ETF: Writing call options involves risk that the underlying security or instrument is sold at a disadvantageous price and may not fully protect the fund against market decline. An ETF may trade at a premium or discount to its Net Asset Value (NAV). These alternative investment strategies may not be suitable for all investors and are not intended to be a complete investment program for any investor. There is no assurance that the ETFs will be profitable.
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.
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The Chartered Financial Analyst (CFA) designation is offered by the CFA Institute. To obtain the CFA charter, candidates must pass three exams demonstrating their competence, integrity, and extensive knowledge in accounting, ethical and professional standards, economics, portfolio management, and security analysis, and must also have at least 4,000 hours of qualifying work experience completed in a minimum of 36 months, among other requirements. CFA® is a trademark owned by CFA Institute.