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THE RISE OF ALTERNATIVES

Once the exclusive domain of institutional and high-net-worth investors, alternative investments have become increasingly accessible to more investors across Canada. The demand for liquid alternatives is expected to flourish over the next decade, evolving the way we view portfolio construction.

An Introduction to Active AlternativesTM

WHAT ARE ALTERNATIVE INVESTMENTS?

Unlike traditional assets (such as stocks, bonds and cash), alternatives generally fall into one of three broad categories:

Alternative assets, such as commodities, real estate, infrastructure or currencies

Alternative strategies, such as long/short, event-driven, market neutral, and global macro

Illiquid investments, such as private credit, private equity, or direct real estate

WHAT ARE LIQUID ALTERNATIVE FUNDS?

Liquid alternatives combine the liquidity and transparency of mutual funds with much of the investment flexibility of hedge funds. Because they rely on alternative sources of returns, liquid alternatives offer investors the potential for enhanced diversification, decreased volatility, and attractive risk-adjusted returns – independent of traditional stock and bond markets.

WHY ALTERNATIVES MATTER

DIVERSIFICATION

With the potential for lower correlation to stocks and bonds, alternative asset strategies can increase portfolio diversification.

DOWNSIDE PROTECTION

Because they don’t move in tandem with stock and bond markets, alternative strategies can help mitigate risk in times of volatility and potentially enhance long-term risk-adjusted returns.

ACCESS TO ADDITIONAL SOURCES OF POTENTIAL RETURNS

Many alternative investments seek to deliver returns via trading strategies outside the “buy and hold” approach. They can complement existing holdings and provide a set of tools.

THE EVOLUTION OF PORTFOLIO CONSTRUCTION

The current investment landscape is drastically different than it once was. Volatility in equity markets and low fixed-income yields mean that investors have to take on much more risk to achieve a similar return compared to 20 years ago. In light of these challenges, it’s become apparent that traditional portfolio management must evolve.

DYNAMIC’S SUITE OF ACTIVE ALTERNATIVE INVESTMENTS

Dynamic offers a suite of alternative investments managed by experienced, in-house portfolio managers.