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Fidelity liquid alternatives

Fidelity liquid alternatives

How can your portfolio benefit from liquid alternative mutual funds?

Many liquid alternative funds seek returns that are less correlated with traditional asset classes, by using additional investment strategies such as short selling, borrowing or derivatives. This can widen the scope of opportunities available to investors beyond long-only investing, adding them to a portfolio of stocks and bonds may provide several benefits:

Increased opportunity set

There’s opportunity for greater risk-adjusted returns

Portfolio diversification

You can reduce volatility and risk in your portfolio through increased diversification.

Downside protection in market stress

It may result in better downside protection in times of market stress.

New: Fidelity Canadian Long/Short Alternative Fund and ETF Series

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Adding liquid alternatives to your portfolio

Investors can think of liquid alternatives as a third asset class to complement their existing portfolio because alternatives can provide diversification beyond traditional asset classes.

Traditional portfolio

Doughnut chart of a traditional 60/40 equity and fixed income portfolio, compared with adding a small allocation to alternative strategies to your traditional portfolio.

Introducing an additional class

Note: Illustrative allocation only. The above is not meant as investment advice.

Alternative mutual funds provide investors the ability to access hedge fund–type strategies through a traditional mutual fund vehicle. Alternative mutual funds combine the advantages of hedge funds and conventional mutual funds. They retain the high liquidity, high accessibility, low minimum investment and strong regulatory oversight of a conventional mutual fund, while offering access to the broader scope of strategies available to a hedge fund. The optimal portfolio allocation to alternatives depends on the nature of your portfolio, investment objectives, constraints and specific investment circumstances.