The new era of alternatives: from niche to necessity
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Building a better core: the critical need for a comprehensive multi-alternatives strategy
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Helping investors find stability in an unpredictable world has been the foundation of Dynamic Funds’ portfolio manager Richard Lee’s financial career. His latest fund offering, Dynamic Multi-Alternative PLUS Fund, or DMAP for short, aims to give investors a smoother ride through markets by tapping into a wider range of alternative opportunities while also generating steady monthly income and long-term growth potential.
We recently sat down with Mr. Lee to discuss the changing investment landscape. In a new era marked by soaring government debt levels, highly concentrated equity indexes, and the evolving nature of financing
Dynamic, a division of 1832 Asset Management L.P., is one of Canada’s most recognized asset management firms. We offer a comprehensive range of actively managed wealth solutions, including mutual funds, ETFs, hedge funds, alternative strategies, and managed asset programs.
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“That’s why so many advisors are asking a basic but important question: If 60/40 isn’t doing the same job anymore, what really belongs at the core of a modern portfolio?”
Richard Lee,
Dynamic Funds
Q: Many advisors are fundamentally rethinking the traditional “60/40” portfolio mix. Why do you think the traditional mix is under increased pressure today? For a long time, 60/40 was almost the default setting:
60 percent in stocks to drive growth and approximately
40 percent in bonds for income and defence. It felt dependable largely because bonds were in a near 40-year-long bull market, interest rates kept moving lower, and central banks globally were able to conduct extraordinary monetary policies to save the markets during periods of immense stress.
Today, the picture is a lot more complicated. Government debt levels in the US and other major economies are much higher, and if inflation stays sticky or interest rates remain choppy,
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Published January 26, 2026
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“Every company’s financing needs are highly unique and different, and as the markets have evolved, many companies are choosing to access their financing through alternative capital. Increasingly, alternative financing is becoming a core part of companies’ capital structures”
Richard Lee,
Dynamic Funds
bonds may not offset equity risk the way they used to. That’s why so many advisors are asking a basic but important question: If 60/40 isn’t doing the same job anymore, what really belongs at the core of a modern portfolio?
A multi-alternative total return solution
Diversification across alternative-focused debt, options, structured finance, and equity, completed with private investments
Private funds (10% cap)
Private credit and equity
Private real assets
Private structured finance
Emerging strategies
Alternative-focused equity
Long stock and options
Long/short strategies
REITs/infrastructure stocks
Alternative-focused debt
Senior and subordinated debt
Preffered/hybrids
Structured credit
Real estate/Infrastructure debt
Options and derivative strategies
Options and futures
Derivatives for incomes and hedging
Other long equity and options strategies
Structured finance
Asset-backed securities
Mortgage-backed securities
Structured corporate loans
Other structured assets
Royalties
DMAP’s
“DOSE+”
Strategy
Q: Where does the Dynamic Multi-Alternative PLUS Fund (DMAP) fit into this new-world paradigm? In this new world, alternatives move closer to centre stage and help to complement the existing asset mix. Dynamic Multi-Alternative PLUS Fund (DMAP) is meant to be a simple way to access that broader set of alternatives in one place. Rather than asking investors to put together several separate mandates − one for private credit, another for infrastructure, another for structured equity, and so on − the fund aims to bring those elements together in a single cohesive solution.
We recognize that “alternatives” represents a range of strategies across the capital structure, each with its own role in balancing return and risk. That said, we aimed to simplify the main portfolio building blocks by utilizing the acronym “DOSE+”: debt, options, structured finance, equities, + private funds. In practice, that can include:
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The overarching objective is to combine these building blocks so your portfolio can draw one or more distinct return streams, is less tied to the ups and downs of traditional markets, and can better withstand stress across cycles. Instead of counting on a single shock absorber − like government bonds − to offset equity risk, you’re intentionally pulling multiple levers across the alternative universe to fine‑tune and strengthen the overall mix.
In a world where bonds feel less like a guaranteed safety net, where public equity markets are increasingly concentrated and correlated, and where alternative capital is financing more and more of the real economy, updating your portfolio to include a thoughtful allocation to alternatives is no longer optional − it’s essential. Against that backdrop, Dynamic Multi-Alternative PLUS Fund (DMAP) is built to offer investors a single, integrated way to bring multi-alternatives into the strategic core of their portfolio.
“Against the current backdrop, Dynamic Multi-Alternative PLUS Fund (DMAP) is built to offer investors a single, integrated way to bring multi-alternatives into the strategic core of their portfolio”
Richard Lee, Dynamic Funds
Debt: alternative-focused income ideas, such as infrastructure debt or private credit that can offer defensive yields and structural protections
Options: tools that can help manage downside risk or opportunistically collect option premiums
Structured finance: strategies built around asset-backed or specialty finance, tapping into cash flows and collaterals beyond typical investment-grade and high-yield bond markets
Equities and options: selective investing in alternative-related equities but paired with options to mitigate downside risks and diversify away from the most crowded areas of traditional indices
Private funds: finding highly differentiated strategies in private markets that can complement the overall portfolio
Dynamic Multi-Alternative PLUS Fund
Seeks to provide attractive monthly income needs and capital appreciation
Potential for significantly lower volatility and reduced correlation to traditional assets
“DOSE+” Strategy
A multi-alternative total return solution
Diversification across the full spectrum of alternative assets (Debt, Options, Structured Finance, Equity, and more)
channels, he highlights the importance of enhanced diversification into alternatives.
If the “status quo” old-world playbook is ineffective in providing a diversified portfolio with an acceptable level of risk, then a new-world portfolio architecture must now be a strategic priority. Mr. Lee argues that access to the full spectrum of alternative asset classes and strategies is critical for managing risk and delivering a more diverse range of return streams and risk profiles. In today’s markets, where portfolio diversification is paramount, he stresses that “alternative assets are no longer a niche investment − they are now a necessity.”
Q: What’s changed in markets that puts more focus on alternatives? One big change is how equity markets are built today. Take the S&P 500, for example. A relatively small group of mega-cap names now drives a large portion of the index. With more money flowing into passive strategies, and into the same winners, markets can become crowded. That can mean sharper moves, faster swings in sentiment, and more periods where volatility feels elevated. In that environment, spreading risk only within traditional public equities may not be enough.
The way companies get financed has also shifted. It’s no longer just about banks and capital markets (i.e., public stocks and public debt markets). The structural shift has seen the rise of alternative financing as the third pillar. Every company’s financing needs are highly unique and different, and as the markets have evolved, many companies are choosing to access their financing through alternative capital. Increasingly, alternative financing is becoming a core part of companies’ capital structures. Said differently, alternatives have evolved from niche to necessity.
Commissions, trailing commissions, management fees, and expenses may be associated with mutual fund investments including ETFs. Please read the prospectus before investing. Mutual funds and ETFs are not guaranteed, their values change frequently, and past performance may not be repeated. Views expressed regarding a particular investment, economy, industry, or market sector should not be considered an indication of trading intent of any of the mutual funds managed by 1832 Asset Management L.P. These views are not to be relied upon as investment advice nor should they be considered a recommendation to buy or sell. These views are subject to change at any time based upon markets and other conditions, and we disclaim any responsibility to update such views. Dynamic® is a registered trademark of The Bank of Nova Scotia, used under license by, and is a division of, 1832 Asset Management L.P. © Copyright 2026 The Bank of Nova Scotia. All rights reserved.