Fund manager research and portfolio construction from Wilshire Funds Management is designed to enhance the offerings’ risk-adjusted performance by incorporating uncorrelated sources of return from funds that utilize alternative investment strategies, according to a news release.
An approach using six alternative investment trading strategies within a discretionary wrap account allows financial advisers to make recommendations from among six risk profiles and two tax treatments (tax-sensitive and tax-neutral), based on investors’ goals, risk tolerance, tax situation, resources and specific needs, the announcement said.
The risk profiles include conservative, moderate conservative, moderate, moderate aggressive, aggressive, and all equity. The corresponding alternative strategies are managed futures, global tactical asset allocation, equity market neutral, long/short equity, merger arbitrage, and convertible arbitrage.
The allocation to alternative strategies varies based on the risk profile selected. In general, each portfolio will have an allocation to alternatives ranging from 8%-20% of the portfolio.
“As individual investors work with their financial advisers to define risk tolerance, they are increasingly focused on managing risk over the long term,” said Sarah McKenzie, Senior Vice President of Brokerage and Managed Products at Ameriprise Financial, in the news release. “Active Diversified Alternatives Portfolios seeks to provide investors with consistency, diversification and risk management through a sophisticated investment process that is easy to use.”
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