A traditional “60/40” allocation to equities and bonds may no longer be enough to meet long-term investment goals. Alternatives can help to lower volatility, enhance returns and broaden diversification of a portfolio.
Benefits of investing in alternatives
Because alternatives tend to behave differently than typical equity and bond investments, adding them to a portfolio may help to lower volatility, provide broader diversification, and enhance returns.
Lower volatility
Alternatives rely less on broad market trends and more on the strength of each specific investment; hence, adding alternatives can potentially reduce the overall risk of a portfolio.
Broader diversification
With low correlation to traditional asset classes, alternatives can be a beneficial way to diversify your portfolio.
Enhance returns
Alternatives can improve the risk and return profile of a portfolio and enhance total return through access to a broader universe of investments and strategies.
