Amid persistent global economic uncertainty and inflation, volatility within both equities and bonds remains elevated. In addition, the correlation between equities and bonds has increased, lessening total portfolio diversification benefits for public market investors.

Excessive volatility and reduced diversification can erode a traditional portfolio's value over time, particularly for investors with cash flow requirements, such as endowment spending and pension payments.

To overcome the higher volatility without sacrificing expected returns, many large institutional investors are making allocations to private alternatives, including private commercial real estate, private credit and private infrastructure. These assets are known for their attractive characteristics, such as predictable income streams, stable long-term returns with low volatility, low correlation to traditional asset classes, and inflation hedging capacity.

However, for small and medium-size institutions, accessing alternatives can be prohibitive due to minimum investment thresholds, costs and administrative requirements. To help investors overcome these barriers, TD Asset Management Inc. (TDAM) recently launched the TD Greystone Alternative Plus Fund, in addition to the existing TD Greystone Balanced Plus Fund, two uniquely designed solutions for institutions.

A newly published paper by TDAM discusses the key highlights of each private alternative strategy and how they might help investors navigate the challenges in the current investment environment.

For investors seeking holistic and integrated total portfolio management that includes public equities, fixed income and private alternatives, the TD Greystone Balanced Plus Fund offers a turnkey balanced solution. For investors managing their own asset mix who seek a diversified standalone alternatives allocation, the TD Greystone Alternative Plus Fund is a solution that offers a fully integrated approach to investing in private alternatives.

TD Greystone Balanced Plus Fund

The TD Greystone Balanced Plus Fund takes advantage of TDAM's core expertise as a total portfolio solution-based manager, seeking to provide mid to high single-digit returns with a lower volatility than traditional balanced funds. Using the firm's disciplined process, the Fund seeks long-term total returns by investing in a balanced portfolio of equity, fixed income and private alternatives.

The TD Greystone Balanced Plus Fund has a focused goal: capital appreciation and income while preserving the value of the original investments. TDAM's investment teams do this through a quality-oriented investment program designed to reduce risk. The Fund seeks to be more income-focused than typical balanced funds and to provide lower return volatility through greater diversification and lower correlation of its wider range of asset classes.

Many institutions do not have the resources or inclination to create a sizable separate portfolio on their own – especially one including real estate, infrastructure and commercial mortgage investments. Nor do they have the time to continually respond to ever-changing market conditions.

This pooled fund was created to give such investors an option that includes access to direct alternatives – an option that has not been readily available in the marketplace.

TD Greystone Alternative Plus Fund

The TD Greystone Alternative Plus Fund allows investors to access TDAM's experience in executing and actively managing alternative investments through a combination of TDAM-managed pool fund investments that include real estate, infrastructure and private credit.

Through a diversified basket of private alternative funds, the Fund provides direct access to over 30 years and $38 billion in private alternative investment expertise. The Fund pairs the boots on the ground required to make high-quality private investments with TDAM's top-down private asset allocation capabilities, and it has accessibility to over 1,300 globally diversified underlying investments.

The Fund focuses on income-oriented private alternatives that aim to help meet institutional obligations. As a diversifying complement to existing equity and fixed income exposures, the Fund also has the potential to improve the risk-adjusted returns of institutional portfolios.

TDAM created the Fund to offer investors a strategy that has the potential to reduce total portfolio volatility while providing the flexibility to allocate to multiple private asset classes. A single strategy also reduces administrative burdens by allowing the investment manager to deploy capital holistically as a single strategy.

For more details, read the full paper.

_{The information contained herein has been provided by TD Asset Management Inc. and is for information purposes only. The information has been drawn from sources believed to be reliable. Graphs and charts are used for illustrative purposes only and do not reflect future values or future performance of any investment. The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual’s objectives and risk tolerance.}

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_{TD Global Investment Solutions represents TD Asset Management Inc. ("TDAM") and Epoch Investment Partners, Inc. ("TD Epoch"). TDAM and TD Epoch are affiliates and wholly owned subsidiaries of The Toronto-Dominion Bank.}