Beyond the traditional 60/40: How alternative investments strengthen the modern portfolio
Discover how integrating alternatives into a balanced strategy can encourage a smoother, more resilient path to long-term wealth.
Standard 60% stock and 40% bond portfolio allocations remain a trusted starting point, establishing a baseline for broad market growth and relative stability. Modern portfolio design does not replace this classic model. It expands upon its foundation to better navigate changing economic dynamics.
While traditional bonds continue to be a core stabilizer to equity risk, recent years of sticky inflation and shifting interest rates have shown that these investments alone don't always provide a complete cushion during equity downturns. Bolstering a portfolio with alternative investments can add integral layers of resilience without abandoning foundational principles, helping to give Canadian investors an adaptable toolkit for long-term growth.
Demystifying alternatives: Looking beyond traditional markets
Alternative investments broaden your exposure beyond traditional stocks and bonds to include strategies that aren’t typically correlated to equity and fixed income markets. These include:
- Real and hard assets: Investments backed by physical goods, like precious metals, commodities and exposure to infrastructure-oriented companies, offer natural protection against inflation and help preserve buying power.
- Targeted alternative strategies: Management techniques, such as income-generating options and flexible credit tools, are designed to produce steady cash flow and help cushion a portfolio against market downturns.
- Non-traditional and emerging assets: Modern investments outside standard stocks and bonds, including digital assets and specialized income tools, offer fresh growth potential and new yield sources to diversify a portfolio.
Moving beyond traditional stock and bond markets allows your portfolio to tap into underlying economic drivers that operate on different cycles.
The alternative advantage: Portfolio resilience and performance
Adding alternatives changes how your portfolio behaves across market cycles. Unlike traditional portfolios that depend entirely on broad stock and bond markets, alternatives introduce specialized capabilities to help build a more resilient wealth strategy:
- Unique growth drivers: Non-traditional assets tap into different sources of return, such as physical supply constraints, option premiums and digital adoption, allowing your money to grow even when public markets stall.
- Enhanced yield generation: These investments use non-traditional strategies—like option overlays and flexible credit—to produce reliable cash flow, supporting your income needs without needing to sell securities during market downturns.
- Greater diversification: Alternatives don't typically move in lockstep with traditional stock and bond markets, helping to protect your portfolio during market declines and provide a smoother long-term investment experience.
Institutional management: Modern portfolios for everyday investors
Modern portfolio construction and managed solutions make it simple for everyday investors to integrate sophisticated alternative strategies into their long-term wealth plans.
Connecting Canadian investors with modern portfolio composition drives ATB Investment Management's (ATBIM) approach to multi-asset investing. Through a rigorous, risk-aware investment process, ATBIM’s Multi-Asset Strategies (MAS) Team pairs in-house analysis with top-tier external manager expertise, taking the friction out of sourcing and managing exposure to alternatives.
Elevating your portfolio: Pursue long-term growth with confidence
Navigating the modern economic landscape calls for an expanded set of investment capabilities. Modern multi-asset strategies integrate alternative investments with traditional holdings, serving as a natural next step for forward-looking Canadian investors.
ATB Spire Portfolios were designed around this framework, seamlessly combining a cost-conscious, index-oriented ETF core, and an allocation of thematic and alternative investments into a single portfolio.
How could expanding your portfolio beyond traditional stocks and bonds help protect your purchasing power and steady your long-term growth?
Discover how ATB Spire Portfolios integrate institutional-grade diversification into an all-in-one solution designed to help keep your wealth moving forward.
ATB Investment Management Inc. (ATBIM) is registered as a Portfolio Manager across various Canadian securities commissions with the Alberta Securities Commission (ASC) being its principal regulator. ATBIM is also registered as an Investment Fund Manager who manages the ATB Funds. ATBIM is a wholly owned subsidiary of ATB Financial and is a licensed user of the registered trademark ATB Wealth.
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