Expanding the Asset Allocation Toolkit

Liquid alternatives potentially offer: tools to manage risk, additional sources of return, diversification, and enhanced asset allocation.

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Risk Management

  • To potentially reduce volatility
  • For potential downside protection
  • Potential “tail risk” mitigation

Return Characteristics

  • Additional sources of potential return
  • Move beyond historic limitations of "stocks/bonds/cash"

Diversification

  • Potentially reduced correlation to traditional assets
  • Varied risk/return characteristics

Enhanced Asset Allocation

  • Potentially enhance the risk-return profile of a diversified portfolio