Growth in the alternative asset class has accelerated rapidly in recent years, and these assets are expected to make up 18—24% of the global investable market by 2025.(1)
Learn what constitutes an alternative asset, and see some of the top alternative investment platforms if you want to diversify your portfolio with this burgeoning asset class.
What is an alternative investment?
An alternative investment, or alt, is an investment in any asset class other than conventional categories, such as stocks, bonds, mutual funds and cash. These can include but aren’t limited to:
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 $0 to $250,000. Annual management fees range from 2.25% to 2.50% 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 10 to 15 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
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 $0 to $250,000. Annual management fees range from 2.25% to 2.50% 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 10 to 15 years to mature, which makes Vinovest most suitable for long-term investors.
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 from 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
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 from 0% to 2.5% depending on the asset.
Pros
Invest in a variety of asset classes including art, real estate and commercial offerings
The Prism Fund is available to non-accredited investors
Cons
Most offerings are only available to accredited investors
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 investment 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
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 investment 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.
Pros
Invest in alternative asset mutual funds and interval funds
Expert-run funds from Ark Invest, Franklin Templeton and other well-known investment management companies
Alts are available in SoFi IRAs
User-friendly browser and mobile platforms
Cons
$500 minimum investment
Fund fees may apply
Limited research tools
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
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
Other fees, such as exchange fees, may apply. Please view our fee disclosure to view a full listing of fees.
Investing in alternative investments and/or strategies may not be suitable for all investors and involves unique risks, including the risk of loss. An investor should consider their individual circumstances and any investment information, such as a prospectus, prior to investing. Interval Funds are illiquid instruments, the ability to trade on your timeline may be restricted. Brokerage and Active investing products offered through SoFi Securities LLC, Member FINRA(www.finra.org) /SIPC(www.sipc.org).
There are limitations with fractional shares to consider before investing. During market hours fractional share orders are transmitted immediately in the order received. There may be system delays from receipt of your order until execution and market conditions may adversely impact execution prices. Outside of market hours orders are received on a not held basis and will be aggregated for each security then executed in the morning trade window of the next business day at market open. Share will be delivered at an average price received for executing the securities through a single batched order. Fractional shares may not be transferred to another firm. Fractional shares will be sold when a transfer or closure request is initiated. Please consider that selling securities is a taxable event.
Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire investment Before trading options please review the Characteristics and Risks of Standardized Options
Advisory services are offered by SoFi Wealth LLC, an SEC-registered investment adviser.
Utilizing a margin loan is generally considered more appropriate for experienced investors as there are additional costs and risks associated. It is possible to lose more than your initial investment when using margin. Please see https://www.sofi.com/wealth/assets/documents/brokerage-margin-disclosure-statement.pdf for detailed disclosure information
Probability of Member receiving $1,000 is a probability of 0.028%
Terms and conditions apply. Roll over a minimum of $20K to receive the 1% match offer. Matches on contributions are made up to the annual limits.
For full promotion terms please visit: https://www.sofi.com/acatoffer. SoFi does not accept cryptocurrencies and has limitations on some mutual funds and OTC stocks. Brokerage and Active Investing Products offered by SoFi Securities, LLC, Member FINRA/SIPC.
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
With an entry point of just $20 per share, Ark7 offers low-cost access to high-yielding real estate: rental homes. Diversify your portfolio with fractional shares of curated rental properties that provide monthly distributions and the potential for long-term appreciation. Use your IRA to invest and trade your shares on a secondary market. Ark7 is available to both accredited and non-accredited investors.
Available asset types
Real estate
Minimum Investment
$20
Annual Fee
8-15% monthly asset management fee
Signup bonus
N/A
With an entry point of just $20 per share, Ark7 offers low-cost access to high-yielding real estate: rental homes. Diversify your portfolio with fractional shares of curated rental properties that provide monthly distributions and the potential for long-term appreciation. Use your IRA to invest and trade your shares on a secondary market. Ark7 is available to both accredited and non-accredited investors.
Pros
Fractional real estate investing
$20 minimum investment
Invest through an IRA
Cons
3% one-time sourcing fee
8-15% monthly asset management fee
1 year minimum holding period before you can sell your shares
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
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.
Pros
$10 investment minimum
IRA accounts available
Private real estate, private equity and venture capital opportunities
Cons
1% early liquidation fee
0.15 annual advisory fee and 0.85% management fee for real estate funds
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
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.
Pros
Access to blue-chip art investing
Low minimum investments
No transaction fees
Cons
1.5% annual management fee
Masterworks takes 20% of the profits when a painting sells
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
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.
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.
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 platforms that connect investors with these types of assets.
Advantages of alternative investments
Alternative investments can be particularly advantageous because of their 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 to 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 in 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 investments.
Diversification. With their low correlation to conventional investments, alternative assets can help diversify your portfolio, reduce market risk and maximize your overall returns.
Potential for bigger returns. Though they may be riskier, returns from alternative investments such as venture capital and hedge funds can also be greater than the returns from the more traditional asset classes.
Interesting and exciting investment opportunities. From vintage cars and real estate to investing in crypto or the next big startup, alternative investments can add some flair to a portfolio for investors who want more than stocks and bonds.
Risks of alternative investments
Alternative investments are generally more complex than traditional investments. They can also have higher fees associated with them and many aren’t regulated by the SEC, which means investors need to spend more time doing their homework and understanding 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.
Lack of regulation. Many alternative assets aren’t regulated by the SEC, which means they don’t have the same safeguards as traditional investments. This can lead to an increase in fraud, especially if the investment is complex.
May be highly illiquid. Some alternative assets lack a secondary trading market or tend to be illiquid because of their complexity and difficulty in valuing them. Others have lock-up periods that prohibit investors from accessing their money, should they need to sell. With some alternatives, it could be years before you can sell out and liquidate the asset.
Can be highly volatile with large variations in returns. There are no guarantees in any investment, but alternative assets can be especially volatile and produce large variations to the returns.
Bottom line
Because of their low correlation to traditional assets, alternative investment can be a diversification option for investors. But consider your time commitment and your tolerance for risk before jumping in. Investors should always understand what they’re investing in and the associated risks. This is especially true with alternative assets due to their increased complexity and lack of federal regulations.
Frequently asked questions
What is an alternative investment platform?
An alternative investment platform is any investment platform that offers access to alternative assets.
What are four examples of alternative investments?
Four examples of alternative investments include real estate, artwork, precious metals and investment-grade wine.
What is the best alternative to the stock market?
The best alternatives to the stock market may be assets that do well when stocks underperform. This can include bonds, which tend to move in the opposite direction of stocks, and real estate, which has no correlation to the stock market.
Matt Miczulski is an investments editor at Finder. With over 450 bylines, Matt dissects and reviews brokers and investing platforms to expose perks and pain points, explores investment products and concepts and covers market news, making investing more accessible and helping readers to make informed financial decisions.
Before joining Finder in 2021, Matt covered everything from finance news and banking to debt and travel for FinanceBuzz. His expertise and analysis on investing and other financial topics has been featured on CBS, MSN, Best Company and Consolidated Credit, among others. Matt holds a BA in history from William Paterson University. See full bio
Matt's expertise
Matt has written 207 Finder guides across topics including:
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