Alternative investments may play a valuable role in a portfolio. We prepared this guide to help answer questions about different types of alternatives:

  • Private equity
  • Private credit
  • Real assets: real estate and infrastructure
  • Hedge funds

Key takeaways

What are alternative investments?

Alternative investments are strategies that go beyond traditional investment approaches, often by investing in private markets. They include private equity, private credit, and infrastructure. Alternatives are not available to all investors,
the way most stocks and bonds are.

Why should I consider them?

Alternatives can improve a portfolio’s diversification, which is key to striking a good balance of risk and potential return. Alternatives also can help capture growth, generate income, manage inflation, and provide tax advantages.

Why now?

Alternative investments have become much more accessible to individual investors in recent years. They used to be the exclusive domain of large institutional investors such as pension funds and college endowments, but now investors like you have access to the same types of investment strategies.

What else should I know?

With alternative investments, investors can sell only at specific times and in limited amounts. Alternatives may charge higher management fees than investments that hold publicly traded assets, and they may take longer to report their holdings and results. Good manager selection and access are critical, because top managers tend to outperform the rest by wide margins

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