By Roy Hayhurst, GuideStone Financial Resources
DALLAS, Texas – GuideStone Funds has launched its new Strategic Alternatives Fund. The fund is available to retirement plan participants in GuideStone’s employer-sponsored retirement plans as well as other eligible GuideStone investors and financial advisors.
The fund seeks to provide absolute returns with both lower volatility than, and low correlation with, traditional equity and fixed-income markets. The term “absolute returns” means that an investment aims to generate a consistently positive single digit total return in most market environments. When speaking of the fund having a low correlation to equity (stock) and fixed-income (bond) markets, it is expected to have much lower price variability than those asset classes.
Investors interested in alternatives investing are generally looking for choices beyond fixed income or equity investments for additional diversification.
“Diversification in an environment of rising volatility is absolutely critical, but the one thing we don’t want investors to do is overreact to short-term moves in the market,” said David S. Spika, chief strategic investment officer of GuideStone Financial Resources. “There is going to be a correction at some point, but we don’t want investors to let short-term moves affect their long-term investment strategy.
“Traditional diversification is not always effective, as we saw in 2008. And diversification is not a guarantee against loss,” Spika continued. “Alternative investments, however, are a way to provide additional types of exposure to hedge risk more effectively. That is the impetus for the GuideStone Strategic Alternatives Fund, which addresses the desire many investors have to potentially lower their risk, with the possibility for more consistently positive returns.”
Like all GuideStone Funds, the Strategic Alternatives Fund is subject to GuideStone’s socially responsible investing policy, which states that GuideStone Funds do not invest in any company that is publicly recognized as being in the alcohol, tobacco, gambling, pornography or abortion industries or any company whose products, services or activities are publicly recognized as being incompatible with the moral and ethical posture of GuideStone. Additionally, as with the other GuideStone Funds, the Strategic Alternatives Fund is actively managed. GuideStone believes the risk-managed and diversifying exposures in the fund cannot be replicated by passive investment approaches.
“We designed the Strategic Alternatives Fund to leverage the skill sets of multiple sub-advisers who focus in different areas of the capital markets where we think there are meaningful opportunities for gain,” Spika said.
Retirement plan and other retail investors who are interested in learning how to incorporate the Strategic Alternatives Fund into their portfolios can email or call GuideStone Customer Solutions at info@GuideStone.org or 1-888-98-GUIDE (1-888-984-8433). Investors in the MyDestination Funds® will have the Strategic Alternatives Fund included in the investment mix as investors approach the target date.
