All about asset classes

Looking for something different? Start with Alternative Funds

What do alternative investments mean to you? Want to learn more?

businesswoman finding solution to a jigsaw

Is now the right time?

In recent years, there has been growing demand from investors for alternative ways to invest alongside the more traditional investments in equities and bonds.

So, to meet investors’ needs, funds that seek to offer ‘alternative’ investments have been developed.

What is an alternative fund?

An alternative fund aims to give investors another kind of opportunity to add to their portfolio, one that offers a wider range of diverse* investments. It is designed to be resilient against turbulence on equity and bond markets and to offer the potential for returns.

The kinds of investments offered by alternative funds might include:

  • Private equity (investment in companies not listed on the stock exchange)
  • Corporate loans (loans to companies)
  • Infrastructure projects (electricity grids, dams, wind farms)
  • Commercial real estate (offices, retail parks)
  • Art, collectibles and cryptocurrencies 
  • Commodities (oil, agriculture, industrial metals)

What are the benefits?

  • Diversification1: because alternative investments may not rise or fall in value in line with traditional investments, they could potentially contribute to stabilise performance and contrast market volatility in a portfolio. 
  • Resilience: if the markets are behaving unusually, alternative investments could potentially have greater resilience 
  • Innovation: these funds seek to offer innovative new investment opportunities

What are the risks?

  • Performance: as alternative investments tend to behave differently than other traditional investments, they may not enjoy the same performance as the other markets
  • Liquidity: Alternative investments may not be as easy to buy or sell as more traditional investments, with the exception of “liquid alternatives”
  • Regulation: some types of alternatives may not be as closely regulated or as suitable for ordinary investors.

An alternative solution

    To address the risks mentioned above, funds known as ‘liquid alternative UCITS’ have been created for investors. 

    They are ‘liquid’ because an investor’s holdings in these funds can usually be bought and sold daily at current prices. They are ‘UCITS’ which means they meet EU standards for well-regulated investments. 

    If you’re interested in alternative investments, this type of fund may be a good place to start. 

    For more information, you can explore what’s available on our platform and benefit from our expertise in this area.

      Other articles

      * Diversification does not guarantee a profit or protect against a loss.

      Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 14 May 2024. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. 

      Date of first use: 1 July 2024
      Doc ID: 3578119

      Marketing Communication