AC Alternatives®

Evolving for Today's Market

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®.

Introducing AC Alternatives

The Essentials of Alternative Investing

  • Overview
  • Definition
  • Benefits
  • Funds

Why Alternatives Now?

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.

Bonds Have Traditionally Helped Balance Equity Market Volatility

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.

Alternatives Defined

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 asset classes: assets outside of traditional stocks and bonds.
  • Alternative strategies: strategies designed to focus on returns less correlated to traditional markets, typically characterized by the use of shorting and other advanced techniques.

Alternative investments historically have low correlations to broad markets and may serve as complements to traditional holdings.

The Evolution of Alternative Investments

Alternatives for Specific Outcomes

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:

  • Alternative income strategies: invest in a wide range of traditional and alternative income-producing assets. They are designed to have less exposure to interest rate risk than bonds do, and they strive to manage credit risk through professional management and diversification.
  • Alternative equity strategies: generally have as their goal to capitalize on a portion of the market's growth, while aiming to provide lower volatility, more downside protection, and low correlations to the overall equity market.
  • Alternative multi-strategy funds: hold a diversified portfolio of alternative strategies allowing the funds' managers to invest for the current environment, with the goal of producing smoother returns over time.

Why Consider Alternatives for Your Portfolio?

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.

Strive to Reduce Volatility for Your Long-Term Goals

Historically, alternatives have reduced risk while providing returns.

For detailed descriptions of indices or investing terms referenced above, refer to our glossary.

* 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.

Seek to Lessen the Impact of Severe Market Downturns

Alternatives historically have shown more resilience in down markets.

Know Your Fund Options

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:

AC Alternatives® Disciplined Long Short Fund

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.

AC Alternatives® Emerging Opportunities Total Return Fund

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.

AC Alternatives® Equity Market Neutral Fund

A portfolio diversifier with high liquidity, low volatility and low correlations to traditional asset classes designed to deliver return regardless of market conditions.

AC Alternatives® Income Fund

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.

AC Alternatives® Long Short Fund

Designed to tactically navigate global equity markets in pursuit of long-term growth, striving for lower volatility and smaller declines than traditional equities.

AC Alternatives® Market Neutral Value Fund

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.

Explore More

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.