< Return to Investing in Liquid Alternatives
Understanding liquid alternative strategies
Liquid alternatives use a range of non-traditional investment strategies to achieve specific investment outcomes. These strategies are offered in a variety of investment styles such as those outlined below. Investors can find these funds on Fidelity's ETF and Mutual Fund screener tools by selecting the 'Alternative' and 'Non-traditional equity' asset classes:
Long-short equity
Seeks to generate returns by taking long positions in stocks the fund expects to increase in value and short positions in stocks the fund expects to decrease in value.
Equity market neutral
Seeks to generate attractive returns while minimizing the impact of market direction by balancing long and short equity positions.
Equity hedged
Seek to hedge downside risk or reduce volatility during periods of market weakness through the use of options and/or derivatives.
Macro trading
Uses analysis of the macroeconomic, political, and market environment to try to capitalize on predicted movements in financial markets.
Systematic trend
Pursues long-term growth by using quantitative models to try to identify and capitalize on market trends.
Event driven
Seeks to exploit mispricing that can occur around corporate events, such as mergers, acquisitions, bankruptcies, and earnings calls.
Derivative income
Offer investors a straightforward way to remain invested in the market while seeking to reshape the risk/return profile of their equity allocations to incorporate complementary defensive or income-oriented features.
Multi-strategy
Employs a combination of different strategies that seek to manage risk and potentially enhance returns.
Defined outcome
Using options and/or derivatives, this strategy seeks to deliver defined investment outcomes that may place a cap on upside potential and attempt to buffer the impact of declining markets.
