Competitive risk-adjusted returns with controlled volatility
Non-traditional investments have the ability to invest in areas and ways traditional investments cannot, providing the potential for improvement of overall risk-return characteristics of a portfolio. As such, a modest allocation to alternative investment strategies may be worthy of consideration by investors who qualify. A non-traditional approach often comes with a different set of investment and structural risks of which investors must become aware. For instance, the approach may involve holding both long and short positions, using hedging strategies, investing in illiquid investments, and employing leverage. The goal of achieving competitive risk-adjusted returns with controlled volatility may also include achieving a particular level of absolute return, rather than relative performance against the performance of an index.