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Alternatives

Diversifying beyond traditional asset classes

Why should clients consider Alternatives?

The Global Financial Crisis (GFC) permanently changed investors’ perceptions of important concepts such as diversification and correlation. The Covid-19 pandemic reasserted these concerns after a period of comparative stability. Extraordinary monetary policy measures implemented by central banks around the world - following both crises - continue to skew investment returns and tighten the relationships between equities, bonds and other risky assets, making diversification harder to achieve than ever before.

Despite this, investors still retain long-term ambitions to generate income and/or capital growth, but there is now much greater awareness of the importance of protecting their money from market falls and creating genuine diversification. Alternatives can help investors to build robust portfolios to withstand a range of different market environments.

A focus on positive returns

There are a wide variety of absolute return funds. However, they share some common characteristics. They are typically benchmark unconstrained and aim to generate a positive return over the medium to long term, no matter what the stockmarket is doing. They may also use sophisticated investment tools like derivatives and techniques such as short selling to achieve their objectives.  It is important to note that absolute return funds are not providing a capital guarantee and may incur periods of loses for investors, in some cases the losses could be significant.  

Accessing a world of expertise

Schroders is a leader in absolute return. Over the past 20 years we have built one of the world’s largest absolute return fund ranges.

Our stable of internally-managed strategies is complemented by a handpicked selection of externally managed, normally hard-to-access, absolute return funds. These are offered in a liquid, transparent and regulated way through our investment platform called GAIA. 

Why Schroders for Alternatives?

Schroders has over 40 years of alternatives experience, and offers access to over 30 strategies.

Our alternatives business is forward-looking and aims to be distinctive in the following four key areas: Impact, Collaboration, Innovation, and by having a Solutions mindset.

Impact - our ability to use Schroders’ market leading sustainability capability to deliver long-term value to our clients, while understanding how our investments impact the wider world.

Collaboration – our breadth of expertise and culture of collaboration enables Schroders to create unique insights and generate better results for our clients.

Innovation – Schroders has a history of innovation to meet the ever-changing needs of our clients and build long-term partnerships.

Solutions – the strength of Schroders’ Solutions platform is in its breadth of investment capabilities and our expertise to create highly distinctive alternatives solutions for our clients.

Explore all Strategic Capabilities

What are the risks?

Past performance is not a guide to future performance and may not be repeated.

The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall.

Please note that there is no guarantee that liquid alternative products will achieve its objective.

Important information: The views and opinions contained herein are those of the authors, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. This webpage is intended to be for information purposes only. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Schroders does not warrant its completeness or accuracy. No responsibility can be accepted for errors of fact or opinion. Reliance should not be placed on the views and information in the webpage when taking individual investment and/or strategic decisions. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.  The data contained in this webpage has been obtained from sources we consider to be reliable. No responsibility can be accepted for errors of fact and the data should be independently verified before further publication or use. The sectors shown are for illustrative purposes only and not to be considered a recommendation to buy or sell. Exchange rate changes may cause the value of any overseas investments to rise or fall. In North America, this content is issued by Schroder Investment Management North America Inc., an indirect wholly owned subsidiary of Schroders plc providing asset management products and services as a US SEC registered investment adviser and in the capacity of Portfolio Manager with the securities regulatory authorities in Canada. For all other users, this content is issued by Schroder Investment Management Limited, 1 London Wall Place, London EC2Y 5AU. Registered No. 1893220 England. Authorised and regulated by the Financial Conduct Authority.

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