A mutual fund designed to smooth portfolio returns even when markets become volatile
Institutional investors have historically outperformed individual investors – partly thanks to an allocation approach that devotes a meaningful portion of their portfolios to. Many institutions rely on alternative strategies for their potential to generate returns that are uncorrelated to traditional assets, manage portfolio volatility and limit the impact of market downturns.
Understanding how institutions build portfolios with alternative strategies may provide individuals important insight into ways to achieve their financial goals.Explore how institutions invest
Annual growth of $100,000 based on annualized rate of return (12/31/1997–12/31/2019)2
The strong returns and low volatility generated by stocks and bonds over the last 10 years may be difficult to replicate in the years ahead. Turning to alternative strategies is one way investors can prepare for a higher-volatility outlook. Alternative strategies are designed to be less sensitive to market movements and offer the potential for positive returns regardless of market direction.
Annual returns 01/01/1999–12/31/2020 (%)
|Pre-crisis Wide variation in asset class performance||Post-crisis Rise of passive investing||Today’s volatility|
Past performance is not indicative of future results. Source: Bloomberg. See endnotes for information on the benchmarks referenced above.
FS Multi-Strategy Alternatives Fund seeks to provide:
Monthly allocation by categoryDownload the fact sheet
FS Multi-Strategy Alternatives Fund seeks to generate positive, low-correlated returns over a complete market cycle.
Together, FS Investments and Wilshire Associates actively manage portfolio positioning that is based on fund objectives, both firms’ macro views, and historical risk and return profiles.
Equity hedge is represented by the HFRI Equity Hedge (Total) Index and includes funds in which the investment managers maintain positions both long and short in primarily equity and equity derivative securities.
Event driven is represented by the HFRI Event Driven (Total) Index and includes funds in which the investment managers maintain positions in companies currently or prospectively involved in corporate transactions of a wide variety including, but not limited to, mergers, restructurings, financial distress, tender offers, shareholder buybacks, debt exchanges, security issuance and other capital structure adjustments.
Global macro is represented by the HFRI Macro (Total) Index and includes funds in which the investment managers trade a broad range of strategies in which the investment process is predicated on movements in underlying economic variables and the impact these have on equity, fixed income, hard currency and commodity markets. is designed to track the performance of U.S. dollar-denominated below investment grade corporate debt publicly issued in the U.S. domestic market.
Relative value is represented by the HFRI Relative Value (Total) Index and includes funds in which the investment managers maintain positions in which the investment thesis is predicated on realization of a valuation discrepancy in the relationship between multiple securities.
Multi-strategy blend represents equal weights of the HFRI Equity Hedge (Total) Index, the HFRI Macro (Total) Index, the HFRI Relative Value (Total) Index and the HFRI Event Driven (Total) Index.
Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market.
S&P 500 is a market-capitalization-weighted index of the 500 largest U.S. publicly traded companies by market value.
Alpha measures excess return relative to expected returns based on the fund’s degree of beta. A positive alpha indicates the portfolio is earning excess returns. A negative alpha indicates the portfolio is lagging in returns.
Beta is a measure of an asset’s or a portfolio’s volatility in comparison to a benchmark or the market as a whole, reflecting the tendency of returns to respond to market swings.
Correlation is a statistical measure of the extent to which two securities move in relation to each other, often expressed via a coefficient ranging from +1 to -1.
Investing in the Fund involves risk, including the risk that a shareholder may receive little or no return on their investment or that a shareholder may lose part or all of its investment. The Fund is subject to interest rate risk and will decline in value as interest rates rise. The Fund may engage in leveraging and other speculative investment practices that may increase the risk of loss of investment and accelerate the velocity of potential losses. In addition to the normal risks associated with investing, international and emerging markets may involve risk of capital loss from unfavorable fluctuations in currency values, differences in generally accepted accounting principles or from social, economic or political instability in other nations. The Fund may invest in derivatives, which are often more volatile than other investments and may magnify the Fund’s gains or losses.
There is no assurance that the investment process will consistently lead to successful investing. Diversification does not eliminate the risk of experiencing investment losses.