Four ways a multi-strategy alternative solution can strengthen portfolios.
Here’s how multi-strategy liquid alternatives can add value across different market conditions.
1. Go beyond 60/40
Some strategies may not provide enough diversification from traditional equity or fixed income investments.
A multi-strategy alternative fund combines multiple alternative investment strategies like long/short equity, market neutral, merger arbitrage or assets such as cryptocurrencies, that can complement traditional investment strategies, offering greater opportunity for diversification.
2. Growth with guardrails
Traditional strategies may perform well in rising markets but can fall short when markets are volatile.
A multi-strategy alternative fund can offer exposure to different strategies in a single solution that behaves differently from other holdings in your portfolio. Some strategies aim to generate returns regardless of market conditions, while others focus on managing volatility. Together, they target consistent performance across different market cycles.
3. Stay invested, avoid timing pitfalls
Investors often pull out of the market when things get shaky, thinking they can jump back in at the right time, which can be risky and hard to time.
With a multi-strategy alternative fund, investors can feel more confident staying invested. These strategies can offer lower correlation to traditional markets and can help reduce overall portfolio volatility, making it easier for clients to stay the course through unpredictable markets.
4. Simplify access to alternatives
Putting together the right mix of investments that adapts to changing markets and evolving investor needs can be challenging and time-consuming.
Because a multi-strategy alternative fund combines complementary alternative strategies in a single solution, it can simplify portfolio construction while still offering access to a broad range of investment opportunities tailored to different goals and risk tolerances. These strategies are managed by experienced fund managers, taking the complexity out of portfolio construction.
By addressing key portfolio gaps with one comprehensive strategy, you can help reduce portfolio volatility and pursue performance across market cycles. A multi-strategy alternative fund aims to provide greater diversification, balance risk and return, and seek long term growth, all in a single streamlined solution.
