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We believe a complex and rapidly changing world demands a new approach to portfolio construction. One that delivers portfolios which are built to be resilient and withstand uncertainty. Portfolios with outcomes at their heart.
Alternatives can play a key role in building such portfolios. Here’s how:
Alternatives can play an important role in building more resilient portfolios, as they can help meet a range of specific goals. They can increase diversification, helping to reduce overall sensitivity to market factors. They can enhance returns, provide opportunities to increase income, or offer protection against inflation.
A key approach when building resilient portfolios is to focus on managing risk and fees, such as using cost-effective index strategies where appropriate. This means more resources can be put towards alternative strategies to enhance overall portfolio outcomes.
We believe there are several longer-term shifts taking place between the roles of public markets and private ones that make the options available to investors in alternatives even greater:
These all help to increase the range of alternatives open to investors, offering more flexibility.
* Source: BlackRock, 30 March 2020.
Explore our alternatives hub here
For illustrative purposes only.
Source: BlackRock, as at March, 2020.