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.
Finder Award SoFi Alt Assets
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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 |
| 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 |
Public.com
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Public.com is a beginner-friendly investing platform that's been growing its lineup of alternative assets. Alongside stocks, bonds, ETFs, options and Treasury Bills, Public.com offers crypto, art, collectibles, NFTs, luxury goods and music royalties. Invest in shares of these alternative assets just like stocks in a company. But while Public.com offers commission-free trading for stocks and ETFs, it charges a 2.5% commission to buy and sell alternative assets.
Notable assets that are currently offered through Public.com include: Police Car by street artist Banksy from 2003, Tom Brady's rookie card and Shattered Backboard Air Jordans, signed and worn by Michael Jordan during one of his iconic moments on court in 1985.
| Available asset types | Stocks, Bonds, Options, ETFs, Cryptocurrency, Alternatives, Treasury Bills, High-yield cash account |
|---|---|
| Minimum Investment | $5 |
| Annual Fee | 2% management fee may apply |
| Signup bonus | Get up to $10,000 and transfer fees covered when you move your portfolio to Public |
| Available asset types | Stocks, Bonds, Options, ETFs, Cryptocurrency, Alternatives, Treasury Bills, High-yield cash account |
|---|---|
| Minimum Investment | $5 |
| Annual Fee | 2% management fee may apply |
| Signup bonus | Get up to $10,000 and transfer fees covered when you move your portfolio to Public |
Vinovest
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Founded in 2019, Vinovest offers investors a convenient way to include fine wine as a part of their portfolios. With Vinovest, investors have direct ownership of the wine in their portfolio, and they can buy, sell or even enjoy the bottles of wine themselves.
Vinovest offers four investment tiers, with minimum investment amounts ranging from $0 to $250,000. Annual management fees range from 1.90% 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 |
| Available asset types | Wine, Whiskey |
|---|---|
| Minimum Investment | $1,000 |
| Annual Fee | Management fee starts at 2.5% annually |
| Signup bonus | N/A |
Yieldstreet
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Yieldstreet is a one-stop shop for investing in alternative assets, with one of the broadest selections of alternative asset classes on this list. Its offerings include:
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 |
| Available asset types | Real estate, Art, Other |
|---|---|
| Minimum Investment | $10,000 |
| Annual Fee | 1–4% |
| Signup bonus | N/A |
Ark7 Real Estate Investing
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 |
| Available asset types | Real estate |
|---|---|
| Minimum Investment | $20 |
| Annual Fee | 8-15% monthly asset management fee |
| Signup bonus | N/A |
Fundrise
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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 a 0.15% annual advisory fee, and its real estate funds have an annual 0.85% flat management fee. Meanwhile, Fundrise's Innovation Fund, which invests in a diversified portfolio of private high-growth technology companies, has annual management fee of 1.85%.
| 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 |
Masterworks
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Before Masterworks came along in 2018, fine art investing wasn't very accessible. The hefty price tag of iconic, multi-million dollar artworks yielded a high barrier to entry, limiting access to only very few people. According to a 2021 report by Art Basel & UBS, works that sold for more than $1 million accounted for 64% by value in 2020, despite only accounting for around 1% of all transactions. In other words, high-priced paintings have been largely inaccessible to the masses. Masterworks allows the everyday investor to include these types of fine art 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. Any potential profit from an eventual sale of the painting will be some years down the road. According to Masterworks, they hold the painting for between three and 10 years before selling. Masterworks also charges a 1.5% annual fee, takes a 20% cut of the proceeds when they sell the painting and requires a minimum of $15,000 to open an account.
| 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
Kalshi is an exchange that lets investors trade event contracts, which are derivative contracts that let investors trade on specified events. 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. Beyond the payout from a correct contract, investors can use Kalshi to potentially hedge their portfolios. For instance, an investor heavily invested in oil stocks could purchase an event contract that pays out if the price of oil declines. If oil prices fall, so too may their oil stocks, but the investor can potentially limit this loss with the proceeds from their correct contract.
While event contracts aren't anything new, Kalshi is the first platform regulated by the Commodity Futures Trading Commission (CFTC), so investors can rest assured that the platform is legit. 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 |
An alternative investment 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:
Basically, if it isn’t stocks, bonds or any other traditional asset and you can invest in it, it’s an alternative investment.
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.
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 alternative investments 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 alternative assets nowadays is through any of the numerous online platforms that connect investors with these types of assets.
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 alternative investments 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.
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.
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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.
An alternative investment platform is any investment platform that offers access to alternative assets.
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. 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.
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A hybrid savings and investment account with potentially very high yields and FDIC insurance.