Alternative Investments
Alternative investments offered by Merrill can play a powerful role in helping you achieve your goals
At Merrill, we look for the broadest range of opportunities to help our clients achieve their investment goals. That’s why we believe private equity, hedge funds, and other alternative investments should be considered a fundamental part of nearly every investor’s portfolio.
Potential benefits of alternative investments
Whether you’re looking to maintain your lifestyle through retirement or gain returns to leave a lasting legacy, alternative investments may be the right choice for you. One potential benefit is that they provide access to the cutting-edge companies at the forefront of technology, healthcare and sustainability.1 They can also complement your traditional equities and fixed income investments and potentially help you improve diversification, increase return potential and mitigate risk. It is important to be aware that alternative investments may be less liquid, use leverage, have less transparency and charge higher fees including a performance incentive.
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Enhanced
diversificationComplement your traditional portfolio and diversify your assets2 -
Increased return
potentialProvide additional sources of returns by exposing you to a broader range of securities3 -
Lower
volatilityMay help strengthen your financial strategy without increasing expected volatility
Ways to access Alternative Investments
We offer alternative investment solutions through a wide variety of structures tailored to your liquidity needs and risk tolerance.
Private Equity
- Private equity funds capitalize on periods of rapid growth or restructuring, investing in private and certain public companies during various stages of their life cycles.
- Private equity managers can improve the operations of the companies they invest in therefore creating even more value for investors.
- Historically, private equity has outperformed public equity, offering investors a premium for the additional risk associated with investing in the private markets, including illiquidity, less transparency for investors, higher fees and longer investment horizon.
Hedge Funds
- Hedge funds engage in a wide range of investments and trading strategies not available to traditional asset managers, such as equity long/short strategies and derivative instruments.
- Adding hedge funds to a portfolio can help provide a buffer for market downturn and assist with capital preservation.
Real Assets4
- Real asset strategies comprise both actively and passively managed investments in precious metals, commodities, real estate, infrastructure, agricultural land and natural resources.
- Investments in real assets often act as additional diversification from stocks and bonds and can serve as a hedge against inflation.
- The Bank of America Private Bank Specialty Asset Management group manages non-financial assets such as farmland, timberland, oil & gas and commercial real estate.
The Merrill difference
As always, we’ll provide you with professional advice, research and portfolio construction so you can invest confidently in these widely recognized solutions.
- The independent due diligence team within our Chief Investment Office5 selects and carefully monitors the alternative investments that are available for purchase on our platform.
- We offer third party alternative investments based on their merits, rather than prioritizing proprietary ones.
- Our scale and commitment facilitates access – sometimes exclusive – to a broad array of asset managers, including some with lower minimums.
Finding the right strategy for you
Talk to your Merrill advisor to discuss which alternative investments may be right for you. We know not all investors are the same, so we can help you find the alternative investments that best align with your goals and risk tolerance.
Explore our other solutions
Whether you’re defining goals, addressing change or figuring out how to move forward, Merrill and Bank of America offer a wide range of solutions to help you take the next step and stay on track.
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1 Sustainable and Impact Investing and/or Environmental, Social and Governance (ESG) managers may take into consideration factors beyond traditional financial information to select securities, which could result in relative investment performance deviating from other strategies or broad market benchmarks, depending on whether such sectors or investments are in or out of favor in the market. Further, ESG strategies may rely on certain values based criteria to eliminate exposures found in similar strategies or broad market benchmarks, which could also result in relative investment performance deviating.
2 Diversification does not ensure a profit or protect against loss in declining markets. Alternative investments involve limited access to the investment and may include, among other factors, the risks of investing in derivatives, using leverage, and engaging in shorts sales, a practice which can magnify potential losses or gains. Alternative investments are speculative and involve a high degree of risk and volatility.
3Alternative investments are intended for qualified investors only. Alternative Investments such as derivatives, hedge funds, private equity funds, and funds of funds can result in higher return potential but also higher loss potential. Changes in economic conditions or other circumstances may adversely affect your investments. Before you invest in alternative investments, you should consider your overall financial situation, how much money you have to invest, your need for liquidity and your tolerance for risk. Alternative Investments are speculative and involve a high degree of risk.
4Nonfinancial assets, such as closely held businesses, real estate, oil, gas and mineral properties, and timber, farm and ranch land, are complex in nature and involve risks including total loss of value. Special risk considerations include natural events (for example, earthquakes or fires), complex tax considerations and lack of liquidity. Nonfinancial assets are not in the best interest of all investors. Always consult with your independent attorney, tax advisor, investment manager, and insurance agent for final recommendations and before changing or implementing any financial, tax, or estate planning strategy. Client eligibility may apply.
5The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., ("Bank of America") and Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S" or "Merrill"), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation.
Some or all alternative investment programs may not be in the best interest of certain investors. Investors must have a pre-existing relationship of six months or longer with the financial advisor before becoming pre-qualified to receive information on alternative investment products. No assurance can be given that any alternative investment's investment objectives will be achieved. Many alternative investment products are sold pursuant to exemptions from regulation and, for example, may not be subject to the same regulatory requirements as mutual funds. In addition to certain general risks each product will be subject to its own specific risks, including strategy and market risk. Certain alternative investments require tax reports on Schedule K-1 to be prepared and filed. As a result, investors will likely be required to obtain extensions for filing federal, state, and local income tax returns each year.
