Class A: IMUAX | Class C: IMUCX | Class I: TASIX | Class R6: TAMAX
What are realistic expected returns in your strategy?
Transamerica Multi-Manager Alternative Strategies Portfolio is a fund-of-funds multi-strategy portfolio that aims to provide returns from differentiated sources across alternatives and other non-traditional asset classes. The fund seeks long-term capital appreciation and aims to outperform its primary benchmark ICE BofAML 3-Month Treasury Bill +3% Wrap Index.
What are the potential risks to your investment strategy?
Our strategy relies on diversification across active investment styles, different asset classes, markets, and geographies to seek to deliver better risk-adjusted absolute returns. A potential risk to the strategy is an environment where correlations increase across underlying strategies and asset classes, reducing diversification. We expect the Portfolio to meet its return objective over the course of a market cycle. Alternative investments, as defined by the HFRI Fund of Funds Composite Index, have historically been most beneficial in periods of rising rates and large equity market drawdowns, when they have significantly outperformed the Bloomberg Barclays US Aggregate Bond TR Index and S&P 500 TR Index, respectively. Conversely, alternatives have tended to underperform in equity market runups as well as markets experiencing frequent reversals.1
How does your strategy correlate with other common strategies investors own?
With interest rates on the rise, and stocks at high valuations in late cycle, alternatives and non-traditional investments can potentially provide differentiated sources of return. Our strategy aims to take advantage of alternatives with the ability to generate returns through long and short positions to distill views or capture market trends as well as alternatives that invest across global markets in equity, fixed income, currencies, and commodities. Historically, the strategy has exhibited low beta/correlation to equities.
What are the benefits of a Fund of Funds in a liquid ’40 Act structure?
Through a fund of funds structure, the strategy is able to invest in more than a dozen underlying funds across several unique managers that access: equity, fixed income, currencies, and commodities in developed and emerging countries; all the while providing investors with liquidity and transparency. The Portflio is designed to offer investors:
1) Investment manager selection and ongoing due diligence;
2) Assessment of market conditions and each manager’s prospects in these market conditions, and
3) Construction of a portfolio of multiple managers that can potentially meet investors’ risk and return expectations in varying market environments, reflecting top-down views.
Discuss the importance of manager selection in the Alternatives space focusing of the relatively wide dispersion between top and bottom quartile performers in alternative categories?
There is a vast universe of liquid alternatives which we try to distill to specific peer groups across: equity long/short, event driven, relative value, tactical trading/macro, and multistrategy. The widest dispersion across performers has historically been in the equity long/short peer group followed by the tactical trading/macro group. In selecting managers in the construction of our multi-manager strategy, we look to access strategies that are differentiated from one another in their investment process and then size them in the portfolio such that their risk contribution is balanced, potentially offering the greatest diversification of risk.
This material is provided at your request solely for your use.
Goldman Sachs Asset Management (GSAM) L.P. is the sub-adviser to Transamerica Multi-Manager Alternative Strategies Portfolio.
This material is provided for informational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. This material is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and makes no implied or express recommendations concerning the manner in which any client’s account should or would be handled, as appropriate investment strategies depend upon the client’s investment objectives.
Views and opinions expressed are for informational purposes only and do not constitute a recommendation by GSAM to buy, sell, or hold any security. Views and opinions are current as of the date of this presentation and may be subject to change, they should not be construed as investment advice.
The strategy may include the use of derivatives. Derivatives often involve a high degree of financial risk because a relatively small movement in the price of the underlying security or benchmark may result in a disproportionately large movement in the price of the derivative and are not suitable for all investors. No representation regarding the suitability of these instruments and strategies for a particular investor is made.
The ICE BofAML 3-Month Treasury Bill +3% Wrap Index and HFRX Global Hedge Fund Index are unmanaged indexes used as general measure of market performance.
HFRI Fund of Funds Composite Index is an index that invests with multiple managers through funds or managed accounts. The strategy designs a diversified portfolio of managers with the objective of significantly lowering the risk (volatility) of investing with an individual manager. The Fund of Funds manager has discretion in choosing which strategies to invest in for the portfolio. A manager may allocate funds to numerous managers within a single strategy, or with numerous managers in multiple strategies. The minimum investment in a Fund of Funds may be lower than an investment in an individual hedge fund or managed account. The investor has the advantage of diversification among managers and styles with significantly less capital than investing with separate managers.
The Bloomberg Barclays US Aggregate Bond TR Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS (agency and non-agency).
The S&P 500 TR Index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.
Emerging markets securities may be less liquid and more volatile and are subject to a number of additional risks, including but not limited to currency fluctuations and political instability.
Foreign securities may be more volatile than investments in U.S. securities and will be subject to a number of additional risks, including but not limited to currency fluctuations and political developments.
High-yield, lower-rated securities involve greater price volatility and present greater credit risks than higher-rated fixed income securities.
Alternative strategies may not be suitable for all investors. Many alternative strategies tend to use sophisticated and aggressive investment techniques. Certain alternative strategies may be tied to hard assets such as commodities, currencies and real estate and may be subject to greater volatility as they may be affected by overall market movements, changes in interest rates or factors affecting a particular industry, commodity or currency, and international economic, political, and regulatory developments.
Diversification does not guarantee a profit or protect against a loss.
The fund intends to utilize individual strategies and hedging techniques in matched combinations that may have lower correlation to broader equity and fixed income markets. Some of these strategies include long/short equity and tactical investment strategies (debt and/or equity); global real estate securities; commodities; managed futures, global macro and non-traditional investments (such as emerging market stocks). There is no assurance that these strategies will protect against losses. Certain hedging techniques and leverage employed in the management of the fund may accelerate the velocity of possible losses.
Mutual Funds are sold by prospectus. Before investing, consider the funds’ investment objectives, risks, charges, and expenses. This and other important information is contained in the prospectus. Please go to www.transamerica.com or contact your financial professional to obtain a prospectus or, if available, a summary prospectus containing this information. Please read it carefully before investing.
Mutual funds are subject to market risk, including the loss of principal. Past performance is not indicative of future results.
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