What Is Alternative?
Alternative investment strategies attempt to expand, diversify, or eliminate the dominant risk factors contained in traditional market indexes, such as equity, credit, and rates indexes. These strategies tend to focus on capital preservation, long-term portfolio diversification, or enhanced risk-adjusted returns in isolation or combination. Application may be across single or multiple asset-classes using a variety of investment techniques.
These strategies not only have the ability to short securities, but they also aim to provide access to differentiated and/or diversifying exposures with a high degree of flexibility and little correlation to traditional market indexes. Many managers in traditional asset classes, particularly in the fixed-income and asset-allocation categories, routinely utilize short exposures, typically via exchange-traded funds or derivative instruments, for risk-management purposes or as an additional source of excess return. While such m