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Alternative investments* typically include all of the investment strategies listed below organized into the main categories of: Opportunistic Equity, Enhanced Fixed Income, Absolute Return, Real Estate, Private Equity and Energy & Natural Resources. Access to these types of investments is generally unavailable through the public markets.
From a portfolio diversification standpoint, alternatives may be attractive due to their potentially lower correlations to traditional asset classes (stocks, bonds and cash). By introducing investments that behave differently than the rest of the portfolio, investors can reduce portfolio risk (volatility) and potentially enhance long-term returns.
The universe of alternative investments is complex and varied. Structuring an allocation to alternatives requires a solid understanding of the diverse types of alternative investments available, plus the ability to research, understand and access managers who may employ unique approaches to particular strategies. The table below outlines key categories of alternative investments.
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Scroll down to review the category definitions, or click here for a printer-friendly version.
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As is the case with all alternative investments, investment partnerships and alternative investments are speculative and are not suitable for all investors, nor do they represent a complete investment program. |
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