Fidelity Investment starts unit to offer liquid alternatives

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Fidelity Investment has formed Fidelity Diversifying Solutions within the firm's Asset Management division, in response to increased demand for alternative investment strategies from its institutional, advisory, and individual clients, Vadim Zlotnikov, president of the unit, said in an emailed statement to Seeking Alpha.

Fidelity is focused on building out its alternative investments capabilities, including hiring investment talent and developing new products in categories such as credit alts and liquid alts, Zlotnikov said.

Liquid alternatives are mutual funds or exchange-traded funds that seek to offer diversification through the use of alternative investment strategies. Late Wednesday, Bloomberg News reported that Fidelity is starting the new unit that will give investors access to hedge-fund-like strategies.

There has been renewed interest in liquid alts from retail and institutional investors, with such funds attracting $8.2B in the first two months of 2022, Erol Alitovski, a Morningstar strategist, told Bloomberg. "It's a different sort of asset class and strategy that can produce returns in a volatile environment," he said.

While Fidelity doesn't time its product development to the markets, "our overall goal is to offer a diverse set of investment capabilities, and that has informed our focus on the alternatives space as we explore opportunities to help our clients in uncertain market environments," Zlotnikov said.

Last year, Fidelity introduced brokerage accounts for teens