Alternatives: private credit, collectibles and other assets beyond stocks

By The Investing Fox · General information, not investment advice

"Alternatives" covers investments outside public stocks, bonds and cash. They have become far more accessible to individuals through funds and platforms, and they are where much of the industry's growth is today.

The main types

• Private credit. Loans to companies made outside the banking system, often at higher interest rates. Retail access is usually through interval funds or other semi-liquid funds that limit how often you can withdraw.
• Private equity and venture funds. Stakes in private companies through a fund, increasingly offered in feeder or semi-liquid structures with lower minimums.
• Collectibles. Art, watches, wine, cards and similar, sometimes sold in fractions on dedicated platforms.
• Infrastructure and commodities. From listed infrastructure funds to gold and other commodity ETFs.

What to check

• Liquidity: how often you can sell or redeem, and what happens if many investors want out at once.
• Valuation: how often the asset is priced and by whom. Smooth reported returns can hide real volatility.
• Fees: management and performance fees can be much higher than for index funds.
• Who it is for: some products are restricted to accredited or professional investors.

The catch

Higher expected returns usually come with less liquidity, less transparency and higher fees. Many investors keep alternatives to a small slice of their portfolio and only after building a core of low-cost diversified funds.