There’s an increasing interest in alternative assets among accredited investors and family offices. According to Cerulli Associates, financial advisors are putting more into alternatives, now making up to 14.5% of client portfolios.

 

This blog post will explore the growing popularity of alternative assets, why investors are attracted to them, and their potential benefits.

 

Are alternative assets really more popular now?

The capital allocated to alternative assets continues to increase. According to Preqin, the $5.3 trillion invested ten years ago is set to grow to $24 trillion by 2026.

A recent survey from May 2023 found that 53% of investors said they plan to invest more in alternative assets in 2024.

Underpinning the growing appetite for alternatives is the ongoing search for hedges against inflation, uncorrelated assets, and stronger diversification.

 

Why are alternative assets more popular now?

The surge in popularity of alternative assets is closely linked to the current economic climate.

With low interest rates, high inflation, and significant market volatility, traditional investments can be less appealing because they can offer lower returns. Investors are moving towards alternative assets because they can potentially deliver higher returns – known as alpha returns.

For example, consider an investor who typically invests in bonds yielding 3%. With inflation at 5%, the real return is actually negative.

By shifting part of their portfolio to alternative assets, like our small business finance investment notes, they can aim for higher returns while also diversifying their investment risks.

 

To learn more about how alternative assets can help protect against rising inflation, click here.

 

What are the benefits of investing in alternative assets?

Investing in alternative assets can come with several advantages. The most common potential advantages of adding alts to your portfolio include diversification, risk mitigation and potentially higher returns.

 

Investing in alternative assets can also help you protect your investments from inflation and market ups and downs. This is because alternative assets often behave differently from traditional investments.

 

 

 

 

 

Take our SBF investment notes as an example. While traditional investments were making low returns because of rising inflation, our SBF investment notes met 100% of their target returns.

The performance of our small business finance notes shows how alternative investments can be helpful in tough economic times. Not only this, but you can also invest in these alternative asset note products through your IRA from multiple providers, making them a tax efficient investment choice too.

What can I do now?

As we’ve seen, alternative investments are becoming more popular, especially in the current economic climate.

Keep up with this growing trend by signing up for a free investor account today, or invest in our two brand new note products.

This will give you access to tailored insights and opportunities in alternative assets, helping you to make informed investment choices.