Alternative investments: An efficient way to diversify
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Why consider certain alternative investments? 

Many investors need to balance seeking compelling total returns while limiting potential downside volatility. Traditional equity and fixed income strategies alone may not offer enough diversification to effectively weather sustained periods of market volatility or economic downturns. It has become a very different and unique environment with inflation and interest rate dynamics, compared to the bulk of the post financial crisis period (2009-2021). 
Chart on the annualized volatility of monthly returns (Nov- 30, 2021 – Dec-31, 2025) common inception date-1

The clients’ total portfolio returns include both traditional and alternative investment allocations. Returns are based on specific allocations that may differ materially from a typical investor’s portfolio.

Performance source: Client account statement values (net of fees) and Ycharts for index returns. Past performance is not a guarantee of future returns.
Chart for cumulative return (Nov. 30, 2021 – Dec. 31, 2025) Common inception date

The clients’ total portfolio returns include both traditional and alternative investment allocations. Returns are based on specific allocations that may differ materially from a typical investor’s portfolio.

Performance source: Client account statement values (net of fees) and Ycharts for index returns. Past performance is not a guarantee of future returns.

 

Where certain alternative investments come in

This in-depth report explores how alternative investments, such as hedge funds and liquid alternative mutual funds, can be used to help strengthen long-term performance, reduce volatility and add meaningful diversification to your portfolio.

Whether you’re a fiduciary advisor, investment committee member or plan sponsor, this resource offers actionable insights backed by industry data and analysis, including:

  • the potential benefits and risks of allocating to alternative investments;
  • how they can enhance a portfolio’s potential returns while also reducing volatility;
  • considerations for fiduciaries; and
  • real-world examples of specific alternative investment strategies and allocations.

If your role is listed below, this is a report you'll want to read.
Retirement plan sponsors

Retirement plan sponsors
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Fiduciaries
pension and endowment committee members

Pension and endowment committee members
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Institutional decision makers

Explore the latest insights and considerations shaping retirement plan decision-making.

Download the report
Designer (3)

About the author

Ryan McWalter, CAIA

Senior Director of Investment Services

Retirement Services

Ryan’s focus is on investment research, performance monitoring and presentations to our retirement plan clients. In his more than 15 years of experience in the financial services industry, he has worked in a variety of product specialist and research roles covering traditional and alternative investments. Most recently he worked in Wells Fargo’s alternative investment group covering the hedge fund platform available to the bank’s high net-worth clients.

Ryan holds his FINRA Series 7 and 66 licenses. He is a graduate of Hobart College.