Liquid alternative mutual funds employ a wide range of strategies with distinct performance characteristics.
Liquid alternative strategies come in three major types:
Alternative Asset Classes
Multi-Strategy Alternative Solutions
Individual liquid alternative strategies can be combined to achieve solutions to specific investor objectives. Goals-based, multi-strategy alternative solutions may include:
Alternative Income Solutions
Provide income and mitigate the impact of rising rates
- Combination of alternative asset classes (real estate, commodities), alternative strategies (long/short credit, distressed), certain traditional asset classes
- Explicit focus on income
Alternative Equity Solutions
Provide exposure to growth while protecting against equity volatility
- Equity-like alternative strategies (long/short equity, event driven)
- Equity diversifying alternative strategies (global macro, trading, managed futures)
Total Alternative Solutions
Provide a diversified allocation to alternatives in one investment
- Combination of multiple alternative strategies
- Strategic and tactical allocations across strategy types
Diversification does not assure a profit nor does it protect against loss of principal.
This information is for educational purposes only and is not intended as investment advice.