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We are committed to evolving our offerings so that you have access to the tools you need to reach your investing goals. During the past decade investor needs and challenges have changed. We have responded by creating AC Alternatives® from American Century Investments®.
Investors have looked to equities to drive returns and fixed-income to reduce risk. But stocks have surged for several years, while bond yields have fallen near record lows.
We believe the risk of simultaneous stock and bond declines today is unusually high. Investors may need to consider complementing their traditional investments with assets and strategies that aim to manage volatility, lessen the impacts of severe market swings, and improve diversification.
For detailed descriptions of indices or investing terms referenced above, refer to our glossary.
There is no universally accepted definition of alternatives, in part because the types of investments considered alternative have evolved over time. Alternative investments encompass:
Alternative investments historically have low correlations to broad markets and may serve as complements to traditional holdings.
Liquid alternatives—alternative investments provided in a mutual fund structure—give investors accessibility, liquidity and transparency. They may also combine specific alternative strategies, alternative assets, and traditional investments to pursue particular objectives:
Historically, alternatives have reduced risk while providing returns.
* Standard deviation is a statistical measurement of variations from the average. In financial literature, it's often used to measure risk, when risk is measured or defined in terms of volatility. In general, more risk means more volatility, and more volatility means a higher standard deviation—there's more variation from the average of the data being measured. In this context, reducing risk means seeking lower standard deviation.
Alternatives historically have shown more resilience in down markets.
Liquid alternatives—alternative investments provided in a mutual fund structure—give investors accessibility, liquidity and transparency. Learn more about the fund solutions we offer to help you leverage alternative investments for your portfolio:
Designed as a core equity complement that seeks to provide: participation in rising markets, with a risk management focus when markets decline; dynamic exposure that adapts to changing markets; an attractive risk/return profile.
Seeks to diversify and enhance returns of a core fixed income portfolio through comprehensive exposure to the asset class, while striving for lower volatility than the overall emerging markets debt category.
A portfolio diversifier with high liquidity, low volatility and low correlations to traditional asset classes designed to deliver return regardless of market conditions.
Designed to address a client's desire to generate consistent income while mitigating the risks of rising interest rates and heightened volatility through broad diversification, adept manager selection and dynamic portfolio construction.
Designed to tactically navigate global equity markets in pursuit of long-term growth, striving for lower volatility and smaller declines than traditional equities.
Seeks to limit broad stock market risk while delivering consistent performance characteristics regardless of market conditions and has no correlation to stocks and low correlation to bonds.
Generally, as interest rates rise, bond prices fall. The opposite is true when interest rates decline.
Diversification does not assure a profit nor does it protect against loss of principal.
Alternative mutual funds that hold a variety of non-traditional investments also often employ more complex trading strategies than traditional mutual funds. Each of these different alternative asset classes and investment strategies have unique risks making them more suitable for investors with an above average tolerance for risk.
Alternative mutual funds are regulated by the Securities and Exchange Commission (SEC) under the Investment Company Act of 1940 which requires certain public disclosure of information including a prospectus, statement of additional information and disclosure of full holdings on a quarterly basis. Hedge funds are exempt from registration under the Investment Company Act of 1940 and therefore not subject to these disclosure requirements making them less transparent.
This information is for educational purposes only and is not intended as a personalized recommendation or fiduciary advice. There are different options available for your retirement plan investments. You should consider all options before making a decision. Our representatives can help you evaluate all of your distribution options.
Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.