Alternative Investments go beyond traditional asset classes like equities and fixed income. They offer different asset types and strategies to:
- Increase portfolio returns;
- Enhance portfolio diversification; and
- Manage market risk exposure.
We believe alternative investments are important part of a modern portfolio. They’re capable of bolstering long-term, risk-adjusted performance and lowering overall portfolio risk.
The role of Alternative Assets within the Modern Portfolio
CIBC Asset Management Inc. (CAM) is one of the largest asset managers in Canada with a 40-year history of active management. In this brief video, Michael Sager, Executive Director, Multi-Asset & Currency, provides a high-level overview of the alternative assets landscape and details why an alternative asset allocation is essential for constructing a modern portfolio.Transcript
Active Currency is a return-seeking tactical, liquid alternative asset class. Many of the drivers of Active Currency returns are specific to this asset class, leading to a low correlation with traditional asset classes, and a diversifying, capital efficient source of return.
A Multi-Asset strategy combines different types of assets to create a more nimble and broadly diversified portfolio. Fund managers make big-picture decisions and balance asset classes to achieve particular investment outcomes, such as growth, income or risk minimization.
Private Equity is ownership or interest in an entity that is not publicly listed or traded. Private Equity investors are able to earn returns that are better than what can be achieved in public equity markets.
Real Assets are physical assets that have an intrinsic worth due to their substance and properties. Real Assets include precious metals, commodities, real estate, land, equipment, and natural resources.
Private Credit refers to non-public lending where the debt is not issued or traded in the public markets. Origination of Private Credit allows for predictable and stable income streams to be established.
The Alternative Advantage
Alternative investment exposure in a portfolio complements existing holdings. This is due to the performance of alternative investments being mostly uncorrelated to that of other asset classes or market factors.
Alternative investment solutions may offer the following benefits:
- Reduced portfolio volatility
- A reliable income stream
- A hedge against inflation
- High risk-adjusted returns
About CIBC Asset Management
CIBC Asset Management Inc. (CAM) is one of the largest asset managers in Canada with a 40-year history of active management. The company combines the flexibility and focus of a boutique firm with the robustness and resources of a large financial institution.
Today, the firm offers a global range of investment products to institutional, private and mutual fund investors. Our investment capabilities include fixed income, equities, alternatives, asset allocation and currency management. CAM is a member of the CIBC Group of Companies.
CIBC’s Alternative Investment Offerings
Our alternative investment solutions are constructed around specific strategies that aim to provide alpha generation over the long term.
- The fund’s accessible structure offers individual investors an income-oriented, conservative portfolio, backed by Ares’ leading credit platform.
- Can be utilized as a core holding within a portfolio, throughout changing market and interest rate cycles.
- Diverse portfolio with limited concentration levels across issuer, industry and sponsor to seek optimal risk-return profile.
These funds are invested in companies and industries that primarily operate in real estate sectors such as infrastructure, real estate, and natural resource.
- Global macro fundamental strategy
- Implemented across traditional and alternative asset classes, and geographies
- Diversifying source of return
- Equity complement and fixed income substitute
- The fund’s underlying investments form a concentrated portfolio, with capital allotted to only the most attractive investment themes.
- Uses a thematic approach to assess opportunities from a bottom-up basis, providing a foundation for manager selection.
- A flexible mandate that seeks unique opportunities globally across all asset classes, investment styles and financial instruments.
- An actively managed multi-strategy credit solution that can complement a core fixed income portfolio.
- Capable of reducing the vulnerability of a traditional fixed income portfolio to a rise in interest rates and volatility.
- Offers the potential for enhanced portfolio diversification due to low correlation to traditional asset classes
- Investing in private market alternatives: Part 1— Market growth, opportunities and risks
- Investing in private market alternatives: Part 2 — The importance of rigorous manager research and ESG considerations
- Investing in private market alternatives: Part 3— Asset class deep dive
- Guide to portfolio construction: the role of alternative investments
- Alternatives: How much to allocate?
- Protecting portfolios during periods of Equity Drawdowns: Assessing the Alternatives
- Where Gold fits in portfolios