Main Types of Alternatives
- Public Market Alternatives
- Foreign Exchange Strategies
- Options Strategies
- Private Market Alternatives
- Real Estate
The power of adding alternatives to a portfolio
Conventional mutual funds are usually invested in public equities and bonds which can offer diversification across market sectors; however, they have a high degree of correlation to traditional financial markets. This means that, in times of heightened volatility, we often see a corresponding response to varying degrees depending on the asset allocation within the mutual fund.
Beyond providing exposure to broader asset classes, Liquid Alternatives are also able to engage in certain investment strategies – including short-selling, borrowing, and use of derivatives. These strategies may be utilized to seek to enhance returns, reduce losses from market declines, reduce overall portfolio volatility, or attain a market neutral position.
The combination of diversification, downside protection, inflation protection and steady income make alternatives a strong addition to traditional balanced portfolios.
Evolving the Traditional Balanced Portfolio – Part 4
The TD Alternative Commodities Pool offers a more diversified exposure to commodities than single commodity funds such as gold or silver. This can be a great complement for balanced portfolios, featuring an innovative approach that seeks to achieve capital appreciation with low correlation to equity and fixed income markets, which can improve diversification when added to investment portfolios.
TD Alternative Risk Focused Pool is a multi-asset solution combining alternative and traditional investment strategies, and is designed to outperform its benchmark across market conditions.