Saturday, June 9, 2012

Alternative Investments

Alternative Investments are investments which fit outside the traditional asset classes of Cash, Bonds, and Equities. Alternative investments include funds like private equity funds, hedge funds, absolute return funds. Alternative investments include both liquid e.g. commodities, listed property, listed infrastructure, and non-liquid e.g. forestry, land, infrastructure assets, and even some of the more fringe investments such as fine wine, art, collectables, etc. Investors include alternative assets in their portfolio for a variety of reasons (specific to each type of investment such as capturing the illiquidity premium, lower correlations with other asset classes, better risk-return outlook, and other personal reasons e.g. being able to touch and feel the investment. Alternative investments tend to be relatively more risky than the traditional asset classes; and are prone to different risks also.

Similar Fund Terms:
Alternative investments, illiquid assets, direct investment, non-traditional asset classes

If you have any further questions or would like to add to this fund management term, then please submit your thoughts below. 

Fund Management Terminology and Concepts Explained:

1 comment:

  1. Is fixed assets buy is the investment? why because we can sell those after some time...