Fidelity Investments is jumping into liquid alternatives, products that offer regular investors access to hedge-fund like strategies and are raking in billions of dollars amid rising interest rates and increased market volatility.
The money-manager has started a new unit, Fidelity Diversifying Solutions, which is hiring staff and rolling out offerings, according to a statement from the entity’s president, Vadim Zlotnikov. The segment also filed to register two funds at the end of last year, Fidelity Global Macro Opportunities and Fidelity Risk Parity.
“We’ve heard from our clients that they are looking to diversify,” beyond traditional stocks and bonds, Zlotnikov said in the statement. “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.”
Liquid alternatives are registered mutual funds that took off following the financial crisis only to fall from favor as the Federal Reserve’s easy money policies buoyed stocks and other plain-vanilla investments. The sector staged a comeback during the pandemic, adding $29 billion last year and marking the first time since 2015 that inflows exceeded redemptions, according to Morningstar Inc.
“There has been significant renewed interest in liquid alts, both from retail and institutional investors,” said Erol Alitovski, a Morningstar strategist, adding that funds attracted an additional $8.2 billion in the first two months of this year. “It’s a different sort of asset class and strategy that can produce returns in a volatile environment.”
In addition to mutual funds, Fidelity Diversifying Solutions plans to offer strategies through traditional limited partnership structures that provide less liquidity to investors, Zlotnikov said.
The new unit is part of Fidelity’s push to expand its alternative investment capabilities. The Boston-based asset manager already offers some strategies for investing in distressed debt, real-estate debt, private equity and Bitcoin.
A last-minute court filing ends a case against the federal tax-collecting agency that had drawn unprecedented conflict-of-interest questions from Democratic critics.
Advisors discuss their use of AI now and how it will change going forward
Medicare scam, pandemic benefit theft, offshore tax evasion — federal prosecutors are casting a wide net.
Report finds that pension income acts as a financial lifeline for retirees facing late-life shocks and raises urgent questions about the DC-only future.
Nine-month electronic trading freeze and share lending program at the center of dismissed claim.
As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management
Growth may get the headlines, but in my experience, longevity is earned through structure, culture, and discipline
