To help institutions and advisors reap the potential benefits of alternatives, Fidelity has developed a framework for allocating to alternative investments. This framework is based on proprietary research that outlines suggested portfolio mixes based on liquidity needs.
Key Insights
Institutions and advisors allocate to liquid and illiquid alternative investments for a variety of potential benefits including enhancing a portfolio’s returns, managing risk, or improving diversification
As product and strategy innovation opens the door to broader usage of alternative investments in multi-asset class portfolios, investors of all types are increasingly seeking guidance on suggested allocation levels
Fidelity has explored return, volatility, liquidity, and other variables for traditional and alternative asset classes to help develop a potential implementation framework for four investor personas: a retiree, a high-net-worth individual, an endowment and an investor with high liquidity needs
Institutions and advisors can consider these allocation ranges in portfolio construction decision-making for themselves or their clients. To view the full framework, which also addresses potential nuances, challenges, and opportunities in implementing alternatives, please download the report.
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