Learn what constitutes an alternative asset and see some of the top alternative investing platforms if you want to diversify your portfolio with this burgeoning asset class.
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9 Excellent
Gemini is a cryptocurrency platform offering access to 100 trading pairs with more than 70 cryptos and four global currencies. The advanced ActiveTrader and Dual Markets features are for the experienced investor, although the platform is user-friendly enough to accommodate beginner investors, as well. Additionally, Gemini is a secure platform that prioritizes advanced security protocols, boasting SOC 2 certification and inspiring investor confidence.
Gemini does not charge an annual fee, but a transaction fee applies based on the transaction size. There is also a 0.5% convenience fee above the market price that applies.
| Available asset types | Cryptocurrency |
|---|---|
| Signup bonus | Get a Finder exclusive offer, $25 in bitcoin when you trade $100 with the code Finder25 |
| Available asset types | Cryptocurrency |
|---|---|
| Signup bonus | Get a Finder exclusive offer, $25 in bitcoin when you trade $100 with the code Finder25 |
8.2 Great
Finder Award
SoFi's expansion into alternative assets is the company's latest move to broaden its all-in-one finance and investing platform, giving its members new opportunities to customize their alternative investing strategies, diversify their portfolios and enhance their portfolio's return potential. Through expert-run funds from Ark Invest, Carlyle, Franklin Templeton, KKR and Clarion Partners, SoFi members can gain exposure to commodities, foreign currencies, private credit, hedge funds, venture capital and real estate.
These funds are available in SoFi's IRAs, too, which means retirement-minded investors can diversify into alts while reaping the tax benefits of IRA investing, all through SoFi's user-friendly platform.
| Available asset types | Stocks, Options, Mutual funds, ETFs |
|---|---|
| Minimum Investment | $500 |
| Annual Fee | Management fees vary by fund |
| Signup bonus | Get up to $1,000 in stock when you fund a new account within 30 days |
| Available asset types | Stocks, Options, Mutual funds, ETFs |
|---|---|
| Minimum Investment | $500 |
| Annual Fee | Management fees vary by fund |
| Signup bonus | Get up to $1,000 in stock when you fund a new account within 30 days |
6.6 Standard
Founded in 2019, Vinovest offers investors a convenient way to include fine wine and whiskey as a part of their portfolios. With Vinovest, investors have direct ownership of the wine and whiskey in their portfolio, and they can buy, sell or even enjoy the bottles of themselves.
Vinovest offers four investment tiers, with minimum investment amounts ranging from $1,000 to $250,000. Annual management fees range from 2.25% to 2.85%, depending on your chosen tier. Vinovest also charges a 2.5% buy-side trading fee, a 1% sell-side trading fee and a 1.5% yearly storage fee, billed monthly. While bottles can be bought and sold at any time, Vinovest notes that most investment-grade wines take anywhere from seven to over 10 years to mature, which makes Vinovest most suitable for long-term investors.
| Available asset types | Wine, Whiskey |
|---|---|
| Minimum Investment | $1,000 |
| Annual Fee | Management fee starts at 2.5% annually |
| Signup bonus | N/A |
| Available asset types | Wine, Whiskey |
|---|---|
| Minimum Investment | $1,000 |
| Annual Fee | Management fee starts at 2.5% annually |
| Signup bonus | N/A |
7 Great
Yieldstreet is a one-stop shop for investing in alts, with one of the broadest selections of alternative asset classes on this list. Its offerings span real estate, private credit, private equity and more.
But some assets are only open to accredited investors, and Yieldstreet requires a minimum investment of at least $10,000. It also charges an annual management fee of 0% to 2.5%, depending on the asset.
| Available asset types | Real estate, Art, Other |
|---|---|
| Minimum Investment | $10,000 |
| Annual Fee | 1–4% |
| Signup bonus | N/A |
| Available asset types | Real estate, Art, Other |
|---|---|
| Minimum Investment | $10,000 |
| Annual Fee | 1–4% |
| Signup bonus | N/A |
| Available asset types | Real estate |
|---|---|
| Minimum Investment | $20 |
| Annual Fee | 8-15% monthly asset management fee |
| Signup bonus | N/A |
| Available asset types | Real estate |
|---|---|
| Minimum Investment | $20 |
| Annual Fee | 8-15% monthly asset management fee |
| Signup bonus | N/A |
7.4 Great
Founded in 2012, Fundrise is widely regarded as the first company to successfully crowdfund real estate investing. In doing so, the company essentially opened the door to real estate investing to the everyday investor. Fundrise has since added private credit and venture capital opportunities to its lineup of available investments.
Fundrise users invest in private real estate investment trusts (REITs) for as little as $10. Expect a holding period of at least five years, though you can sell early for a flat 1% fee. Fundrise charges an annual advisory fee of between 0.15% and 1.85%, depending on the fund
| Available asset types | Real estate, Private credit, Venture capital |
|---|---|
| Minimum Investment | $10 |
| Annual Fee | 0.15% and 0.85–1.85% |
| Signup bonus | N/A |
| Available asset types | Real estate, Private credit, Venture capital |
|---|---|
| Minimum Investment | $10 |
| Annual Fee | 0.15% and 0.85–1.85% |
| Signup bonus | N/A |
7.2 Great
Masterworks allows the everyday investor to include iconic, multi-million dollar artworks as a part of their portfolio. Through Masterworks, you can invest in securitized blue-chip artworks for as little as $20. You can then hold the artwork for any potential sale or, if there's demand, trade your shares on the secondary market.
Masterworks charges a 1.5% annual fee, requires a minimum of $15,000 to open an account and takes a 20% cut of the proceeds when they sell the painting — which is typically between three and 10 years.
| Available asset types | Art |
|---|---|
| Minimum Investment | $5,000 |
| Annual Fee | 1.5% |
| Signup bonus | N/A |
| Available asset types | Art |
|---|---|
| Minimum Investment | $5,000 |
| Annual Fee | 1.5% |
| Signup bonus | N/A |
Kalshi is an exchange that lets investors trade derivative contracts on specified events, called event contracts. They can include everything from the amount of rainfall on a particular day to international affairs to the winner of an Academy Award.
Kalshi's event contracts are structured as Yes or No questions, each with a yes price and no price that can range from $0.01 to $0.99. Once the outcome of the event has been determined, Kalshi pays out $1 for each correct contract. Kalshi makes money by charging a transaction fee on the expected earnings on the contract.
| Available asset types | Event contracts |
|---|---|
| Minimum Investment | $0 |
| Annual Fee | $0 |
| Signup bonus | N/A |
| Available asset types | Event contracts |
|---|---|
| Minimum Investment | $0 |
| Annual Fee | $0 |
| Signup bonus | N/A |
What Matt thinks about real estate investing
REITs are a great way to diversify a portfolio outside traditional investments and can be attractive for their competitive dividends and long-term capital appreciation. REITs let anyone invest in large-scale, income-producing real estate, and they've been a favorite among investors looking for a steady stream of income for decades.
— Matt Miczulski, Editor, Investments.
An alternative investment, or alt, is an investment in any asset class other than conventional types of investments.
“Alternative investing consists of investments that typically fall outside the normal stocks, bonds and cash trifecta,” explains Stephen Kates, CFP®, founder of Clocktower Financial Consulting. “Categories like private equity, venture capital, private debt, commodities and sometimes real estate are all considered alternative investments.”
Alternative investments can include but aren’t limited to:
Basically, if it isn’t stocks, bonds or any other traditional asset and you can invest in it, it’s an alternative asset.
Current state of alternative investing
Alternative investing is buzzing this year. Managers are looking for more investors by lowering minimums or democratizing access to these categories through funds and ETFs (exchange-traded funds). I expect we will continue to see more accessible alternatives as consumers learn more about them and seek out assets that are less correlated to the gyrations of the stock and bond markets.
— Stephen Kates, CFP®
It’s now easier than ever to invest in alternative assets, and new markets emerge regularly. Technological advancements have spurred not only the popularity of alts but also the accessibility, giving everyday investors access to new markets and potentially profitable investment opportunities that used to be out of reach.
Retirement-focused investors can consider self-directed individual retirement accounts (IRAs) as a way to invest in alternative assets. These IRAs are specifically designed to accommodate assets not typically permitted by most traditional IRA custodians.
But perhaps the easiest way to invest in alts nowadays is through any of the numerous online brokerages that connect investors with these types of assets.
Alternative investing can be particularly advantageous because of its low correlation to stocks and bonds, especially in markets where these conventional investments are underperforming. That’s what Terri Spath, certified financial analyst, certified financial planner and founder of investment advisory firm Zuma Wealth, said about the benefits of adding alts to a portfolio.
“The biggest benefit of alternative investments comes from their low correlation to stocks and bonds,” Spath said. “With stocks bleeding the profits from portfolios and bonds like dead money thanks to inflation and interest rates, alternatives are where we are putting a lot of client money.”
While alternative assets can help reduce a portfolio’s market risk, they can also give investors exposure to potentially lucrative investments.
“Alternative investments are often attractive from both a risk perspective and a return perspective,” says Robert R. Johnson, a professor of finance at the Heider College of Business at Creighton University. “From a risk standpoint, alternative investments are often viewed as good diversification vehicles … Alternative investments are also often attractive from solely a return standpoint, because the returns from asset classes such as venture capital and hedge funds can … be greater than the returns from the more traditional classes.”
Here are some of the main advantages of alternative investing.
Alternative investments are generally more complex than traditional investments. They can also have higher fees, and many aren’t regulated by the US Securities and Exchange Commission (SEC), which means investors need to spend more time doing their homework due to the potential risks involved.
They’re also known for being relatively illiquid compared to traditional investments, which means investors should expect to have their money tied up for a longer period.
“One of the biggest problems with many alternative investments is a lack of liquidity,” says Johnson. “Other assets, like commercial and residential real estate have significant transaction costs and can be converted into cash over a longer period and with greater price uncertainty. This is an aspect of many alternative investments that the purveyors of those investments often times gloss over.”
So, while alternative assets provide investors with a great diversification tool and the potential for a higher return, investors need to be aware of the unique risks associated with these investments.
These are some of the biggest risks of investing in alternative assets.
Because of their low correlation to traditional assets, alternative investments can be a diversification option for investors. Before jumping in, however, consider your time commitment and risk tolerance. Understanding what you’re investing in and the associated risks is especially true with alternative assets due to their increased complexity and lack of federal regulations.
An alternative investing platform offers access to alternative assets, such as cryptocurrency, real estate or art.
Four examples of alternative investments include real estate, artwork, precious metals and investment-grade wine.
The best alternatives to the stock market may be assets that do well when stocks underperform. These assets can include bonds, which tend to move in the opposite direction of stocks, and real estate, which has no correlation to the stock market.
SoFi’s robo-advisor is a low-cost automated investing option with personalized investment advice and live advisor support.
UTMA accounts are more flexible and have broader investment options, while 529 accounts are best for education-based savings.
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