Fundamental Alternatives is a multi-strategy alternative fund that’s designed to provide low volatility and high risk-adjusted returns to investors.
We believe a key advantage of alternative strategies is that they can pursue returns that aren’t completely dependent upon the performance of the broader market. We employ three alternative strategies:
- Long/Short Equities
- Long/Short Credit
- Long/Short Macro
Our ability to take long and short positions enables us to pursue opportunities both when the fundamentals for securities and markets are improving, as well as when they are deteriorating.
These three strategies have low or negative correlations with each other, meaning they generally move independently of one another, and because of that we can pursue attractive returns across varying market environments.
We utilize a rigorous four-step investment process:
1. Idea Generation
We start by making fundamental observations about companies, industries or macroeconomic factors. Here, we look for changes as well as imbalances or conditions that don’t seem to be sustainable.
2. Fundamental Research
The next step is fundamental research. Here, we conduct in-depth analysis to identify the type of change that is taking place and what impact it may have.
3. Scenario Analysis
The third step is scenario analysis. We test our thesis and model various potential outcomes and what the magnitude of the change could be for the areas we think will be impacted.
4. Security Selection
The final step is security selection. We look for the companies or securities that will be most impacted by this change, and focus on the opportunities within that subset that provide the most attractive risk/reward tradeoff.
For some alternative strategies, the investment approach can be difficult to understand, but we try to pursue a more transparent approach. We invest in opportunities arising from major changes taking place around the world; from revolutionary methods in cancer treatment, to the way we consume entertainment today and its impact on traditional media and cable companies.
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Alternative asset classes may be volatile and are subject to liquidity risk. Mutual funds are subject to market risk and volatility. Shares may gain or lose value.
These views represent the opinions of OppenheimerFunds, Inc. and are not intended as investment advice or to predict or depict the performance of any investment. These views are as of the publication date, and are subject to change based on subsequent developments.