FS Multi-Strategy
Alternatives Fund

A mutual fund designed to smooth portfolio returns even when markets become volatile

Learn about performance

Helping individuals navigate volatility

FS Multi-Strategy Alternatives Fund’s blend of active managers and rules-based strategies provides a better way to access low-correlated returns with a focus on reducing portfolio volatility for its investors.

FSMSX PERFORMANCE VS. 10 WORST TRADING DAYS FOR S&P 500 SINCE INCEPTION (5/17/2017–3/31/2020)1

What individuals can learn from institutions

Institutional investors have historically outperformed individual investors – partly thanks to an allocation approach that devotes a meaningful portion of their portfolios to alternative investment strategiesAlternative investment strategies seek to generate positive returns, irrespective of broader market performance. These strategies tend to differ from long-only strategies by incorporating both long and short investments and alternative assets (e.g., private credit, private equity, real estate, natural resources, infrastructure, currencies).. Many institutions rely on alternative strategies for their potential to generate returns that are uncorrelated to traditional assets, manage portfolio volatility and limit the impact of market downturns.

Understanding how institutions build portfolios with alternative strategies may provide individuals important insight into ways to achieve their financial goals.

Explore how institutions invest

ANNUAL GROWTH OF $100,000 BASED ON ANNUALIZED RATE OF RETURN (12/31/1997–12/31/2017)2

Why alternative investment strategies?

The strong returns and low volatility generated by stocks and bonds over the last 10 years may be difficult to replicate in the years ahead. Turning to alternative strategies is one way investors can prepare for a higher-volatility outlook. Alternative strategies are designed to be less sensitive to market movements and offer the potential for positive returns regardless of market direction.

ANNUAL RETURNS 01/01/1999–12/31/2019 (%)

Pre-crisis
Wide variation in asset class performance
Post-crisis
Rise of passive investing
Today’s volatility
44.2 13.4 12.2 7.4 28.7 15.0 10.6 15.8 12.5 4.8 26.5 15.1 2.1 16.0 32.4 13.7 1.4 12.0 21.8 1.0 31.5%
25.2 9.1 8.9 5.4 25.3 10.9 7.7 15.3 12.0 -15.4 25.8 11.9 -0.2 11.0 14.3 5.6 -0.3 8.7 12.8 0.6 13.9%
24.3 7.8 7.1 1.0 21.4 8.2 7.3 12.4 10.9 -18.0 25.0 11.4 -3.1 8.7 12.5 4.0 -1.0 6.4 8.0 0.6 8.8%
21.0 6.7 6.9 -4.3 20.5 7.7 6.8 11.9 10.7 -21.8 24.6 10.5 -3.7 6.4 8.4 3.1 -1.3 5.0 7.2 -3.0 7.6%
17.6 2.0 0.4 -4.7 19.3 5.6 6.0 11.7 8.4 -26.7 19.9 10.5 -3.9 6.4 7.1 1.8 -1.5 4.6 5.5 -4.4 7.4%
14.7 -9.1 -11.9 -22.1 9.7 4.6 4.9 8.2 5.5 -37.0 4.3 8.1 -7.5 -0.3 -0.4 1.1 -3.6 0.1 2.5 -5.7 6.2%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Past performance is not indicative of future results. Source: Bloomberg. See endnotes for information on the benchmarks referenced above.

FSMSX: Bringing institutional-style investing to individuals

FS Multi-Strategy Alternatives Fund seeks to provide:

Past performance is not indicative of future results. All FSMSX portfolio data is as of March 31, 2020. The expense ratios for Class I Shares are 3.30% total annual fund operating expenses,6 1.97% total annual fund operating expenses (after expense reductions)7 and 1.50% total annual fund operating expenses after expense reductions, excluding dividend and interest expenses.6 The expense ratios for Class A Shares are 3.55% total annual fund operating expenses,7 2.22% total annual fund operating expenses (after expense reductions)7 8 and 1.75% total annual fund operating expenses after expense reductions, excluding dividend and interest expenses. 7 8 Performance with sales charge is calculated with maximum sales charge of 5.75% for Class A Shares. Performance data quoted represents past performance and is no guarantee of future results. Returns for time periods greater than one year are annualized. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost, and current performance may be lower or higher than the performance quoted. Please call 877-628-8575 or visit our website at www.fsinvestments.com for performance data current to the most recent month-end. One cannot invest directly in an index.

An adaptive allocation strategy

FS Multi-Strategy Alternatives Fund takes a hybrid approach by combining active managers and rules-based strategies to help generate returns that have low correlation to stocks and help manage volatility. This allows the fund to pursue its objectives though dynamic positioning and strategic allocations.

46%

Active managers

Category Allocation*
Chilton equity long/short Our long/short equity strategy focuses on high-quality companies with strong business models and growth potential at reasonable valuations. 20%
MidOcean credit long/short Our long/short credit strategy seeks to capture current income and growth from three primary pockets of inefficiencies in the credit market: callable bonds, short-dated credit and crossover credit. 26%

54%

Rules-based strategies

Category Allocation*
Equity hedge Equity hedge strategies typically buy stocks expected to appreciate while incorporating shorting or hedging to mitigate market risk and/or generate additional alpha. 15%
Event driven Event driven strategies seek to exploit mispricing due to corporate events, such as bankruptcy, merger, acquisition or spinoff, to capitalize on price inefficiencies. 0%
Global macro Global macro strategies seek to invest through the use of futures instruments and often across a variety of asset classes. They tend to place directional bets on the prices of underlying assets driven by macro views or price trends. 18%
Relative value Relative value strategies attempt to monetize the expected price convergence or divergence of related securities by buying and selling related assets. 21%

*Percentages may not total 100% due to rounding. Portfolio allocation as of March 31, 2020. Holdings are subject to change.

Access our strategy summary

MONTHLY ALLOCATION BY CATEGORY

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FS Multi-Strategy Alternatives Fund seeks to generate positive, low-correlated returns over a complete market cycle.

Partnered with an industry leader in hybrid portfolios

Together, FS Investments and Wilshire Associates actively manage portfolio positioning that is based on fund objectives, both firms’ macro views, and historical risk and return profiles.

Learn more about our partnership with Wilshire.