iAtoday

For a long time, alternative funds were primarily associated with the pursuit of returns. However, in an environment where markets are more volatile and future returns seem less predictable, their role is changing: they are increasingly used to smooth out a portfolio’s performance over time, focusing more on reducing overall risk than on market direction.

Jean‑Philippe Renaud, MBA, Manager, Investment, Group Benefits and Retirement Solutions explores this approach in an article published in Human Resources Director (HRD). He explains why the conversation is moving away from access and toward function, specifically how alternative funds can help absorb risk when public assets no longer offset one another as effectively as they once did.

Read the article

In the article, Jean-Philippe sheds light on:

• The value of diversifying with alternative funds (private credit, real estate, infrastructure), which are often less correlated with the day-to-day fluctuations of stocks and bonds
• The role of cash flows, sometimes contractual, which can contribute to more consistent performance and fewer day-to-day fluctuations
• Limitations to keep in mind: alternative funds remain sensitive to (real estate) cycles, which is why portfolio integration and manager selection are so important
• Increased accessibility: gradual integration into a variety of solutions (including target-date portfolios such as ATTITUDE) and the development of options offering greater “à la carte” flexibility

Read in HRD: A clear perspective on how alternative funds can help build more resilient portfolios by minimizing fluctuations rather than promising to eliminate them.

Want to learn more about alternative funds and how your clients can incorporate them into their offers? Contact your iA Financial Group Account Executive.