Alternative Investments: A Shift from Stocks to Hedging Strategies

By Cleo Chang - October 25, 2017

Alternative investments can be an important strategic addition to traditional portfolios. They're designed for weathering a volatile market, generating attractive returns and providing all-important diversification. But that also means they're not designed to outpace a rising market—like the one we're in now that began in 2009. As market gains extend further, a growing number of investors seem to be concerned about the equity market and the appetite for alternative strategies is on the rise.

The alternative investment universe is broad; I believe there's always opportunity to be found. As we extend into the later innings of the economic and business cycle, three areas seem well-suited to the environment:

  1. Equity long-short strategies, particularly those focused outside the U.S.
  2. Opportunistic credit strategies
  3. Strategies that hedge duration

Only one thing keeps me up at night. I address this "x factor" in the video below and share why I'm optimistic about alternative investments.

Cleo Chang
Cleo Chang
Senior Vice President and Head of Investment Solutions
  • Related Articles
  • More From Author

Niche Income Environment: Still Attractive?

Niche income securities provide interesting opportunities in the hunt for uncorrelated returns. Head of Investment Solutions Cleo Chang explains why.

An Alternative Path for Fixed-Income Returns

If you have clients looking for fixed-income solutions in the current market environment, consider an active alternative to help manage risks.

Getting to Know Asset-Backed Securities

Even though asset-backed securities (ABS) represent a small part of the overall securitized market, learn about why we believe this asset class offers potential diversification benefits and attractive risk-adjusted performance.

    Niche Income Environment: Still Attractive?

    Niche income securities provide interesting opportunities in the hunt for uncorrelated returns. Head of Investment Solutions Cleo Chang explains why.

    An Alternative Path for Fixed-Income Returns

    If you have clients looking for fixed-income solutions in the current market environment, consider an active alternative to help manage risks.

    Asset TV Master Class: Liquid Alternatives

    Cleo Chang, Head of Investment Solutions, with the help of Asset TV tackles the difficult questions regarding alternative investments, including current environment, strategies to consider and path to implementation.

      Alternative mutual funds that hold a variety of non-traditional investments also often employ more complex trading strategies than traditional mutual funds. Each of these different alternative asset classes and investment strategies have unique risks making them more suitable for investors with an above average tolerance for risk.

      Diversification does not assure a profit nor does it protect against loss of principal.

      The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.