• The spectrum of alternatives

    Alternatives include a spectrum of assets, strategies and structures, each designed to deliver different benefits. Alternative investments strategies, while not guaranteed, may help meet specific objectives and complement a traditional portfolio allocation.

    Alternatives complement traditional portfolios

    Investment Objectives
    Investment
    types
    Traditional
    investments
    Equities
    Large, mid, small, growth, value,
 international, emerging markets
    Alternative
    investments
    Capital
    preservation
    Growth
    Income
    An investing strategy that seeks to minimize volatility by profiting from long positions in stocks that are expected to appreciate in value and short positions in stocks that are expected to decline in value.Long/short equity
    Venture capital aims to provide financing to promising start-up and early-stage companies in exchange for an equity ownership stake.Venture capital
    High net worth individuals and institutions may invest in private equity funds, which purchase and grow private companies. Private equity funds can also provide financing to companies seeking to expand, enhance operational efficiencies and make capital structure improvements, usually in exchange for common equity.Private equity
    Fixed income
    Treasuries, investment grade, high yield, emerging market debt
    Senior secured loans are the primary source of debt financing for private companies. These loans are typically “secured,” or backed by a company’s assets. They also typically have floating rates, which adjust with changes in market interest rates.Senior secured loans
    With event-driven credit, an investment is made in the debt of companies experiencing a corporate event, such as an acquisition, merger or reorganization that may result in market price inefficiencies.Event-driven credit
    Debt is typically labeled distressed when the issuing company may face difficulties meeting its financial obligations.Distressed debt
    Real assets
    REITs,
    long-only commodity
    For purposes of investment, real estate generally refers to commercial real estate. Institutional investors, such as endowments and pension funds, may own commercial real estate directly with the goal of achieving rental income. Smaller investors may access real estate through single manager or fund of funds investment vehicles.Real estate
    Managed futures are investment funds managed by commodity trading advisors (CTAs) that trade futures on commodities, global currencies, interest rates, equities and energy.Managed futures
    Investing in alternatives is different than investing in traditional investments such as stocks and bonds. Alternatives tend to be illiquid and highly specialized. When building a portfolio that includes alternative investments, investors and their financial advisors should first consider an individual’s financial objectives. Investment constraints such as risk tolerance, liquidity needs and investment time horizon should be determined.
    Equities
    Traditional
    Large, mid, small, growth, value,
 international, emerging markets
    Alternative Investments
    Long/short equity
    Capital preservation

    Growth
    Venture capital
    Growth
    Private equity
    Growth
    Fixed Income
    Traditional
    Treasuries, investment grade, high yield, emerging market debt
    Alternative Investments
    Senior secured loans
    Capital preservation

    Income
    Event-driven capital
    Capital preservation

    Growth
    Income
    Distressed debt
    Growth
    Real assets
    Traditional
    REITs, Long-only commodity
    Alternative Investments
    Real Estate
    Capital preservation

    Managed futures
    Growth
    Income