Alternative Investments: Fidelity Diversifying Solutions To Meet Investors’ Need For Portfolio Diversification

June 22, 2022 | Alternative Investments, News
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Fidelity Diversifying Solutions was launched in October 2021.

Fidelity Diversifying Solutions was launched to address the growing demand from investors for alternative products that offered diversification and better performance compared to the fast-diminishing returns from traditional [60:40] products such as bonds and stocks. (Pensions&Investments)

Led by president Vadim Zlotnikov, the unit has already received SEC approval and registration for two mutual funds — Fidelity Global Macro Opportunities Fund and Fidelity Risk Parity Fund.

In an interview, Zlotnikov said there was robust demand for alternatives from institutional, retail and adviser client segments, given the pressing need for higher returns at lower risk.

In a report last month, KKR, the $475 billion alternative-asset manager, said: “Without question, the 2010s were a golden decade for the ‘60/40′ investor. In particular, the stars were perfectly aligned for the ‘60/40′ allocation to perform strongly after the Great Financial Crisis of 2008. Stocks rose and rates fell; thus bond prices rose and the stock-bond correlation was muted. However, we believe each of these premises will be at risk in the next decade and are now beginning to turn.”

“We’ve heard from our clients that they are looking to diversify,” beyond traditional stocks and bonds, Zlotnikov had said when the unit was launched. “We’ve explored these areas in the past, but today and going forward we have a strategic commitment to building a world-class alternative franchise.”

Related Story: Fidelity Starts New Unit Offering Liquid Alternatives

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