FidelityConnects

Liquid alternatives: Rethinking alpha generation and portfolio diversification - David Way

April 6, 2021

Portfolio Manager David Way discusses opportunities in liquid alternatives as an emerging asset class. David shares how Fidelity Long/Short Alternative Fund is designed to work at times of volatility and notes where a liquid alts strategy could fit in an investor’s portfolio. Fidelity Long/Short Alternative Fund is primarily focused on North America, which accounts for about 90% of the Fund’s holdings. David believes there is opportunity to add alpha here because of a reemergence of the commodity cycle. He notes that the Fund is for investors who are optimistic about the future. David can fully invest in his ideas for long positions. In fact, the structure of the Fund allows him to own 130% of assets in long positions: he can own 30% more of his “best” ideas, because he can also short the “worst” ideas. Currently, inflation is on everyone’s mind, and David notes that it is important to be macro aware, but he focuses on companies name by name and analyzes their risk and potential for future outperformance.

Recorded on March 31, 2021.