Gill Kabe, Head of Investor Relations
When it comes to investing, most people think first of the traditional duo: stocks and bonds. They’ve long been the backbone of portfolios, but in today’s evolving markets, savvy investors are asking what else belongs in their toolkit.
There’s a growing universe of alternative investments, tools that can build, protect, or fine-tune a portfolio’s performance. The more you understand these tools, the better equipped you are when markets shift.
Just as a carpenter wouldn’t build a house with only a hammer, investors shouldn’t rely on a single type of asset. A diversified toolkit can:
Structured notes combine elements of bonds and derivatives, creating a defined-outcome investment that can include capital protection barriers or enhanced returns.
They appeal to investors seeking risk-managed growth or partial downside protection, especially useful when markets are flat or uncertain.
For a deeper dive, read How You Can Unlock Predictable Returns in Unpredictable Markets.
REITs allow investors to participate in large-scale property portfolios without directly owning or managing buildings. They typically provide regular income from rental yields and offer exposure to real-estate performance, a practical way to balance a stock-heavy portfolio.
Gold, oil, copper, and agricultural products fall into this group. Commodities are often used as inflation hedges or to counterbalance volatility in equity markets. Because they don’t always move in step with stocks, they add diversification and can smooth long-term performance.
These investments target privately held companies, from early-stage start-ups to mature firms seeking growth capital. Although less liquid, they can capture high-growth opportunities not listed on public markets. Investors must understand time horizons and risk profiles before allocating capital here.
Hedge funds use active strategies—such as long/short positions or market-neutral approaches—to seek returns independent of market direction. For retail investors, alternative ETFs offer an accessible entry point, providing exposure to these strategies through standard exchanges.
The main appeal of alternative investments is diversification. By mixing different asset classes, an investor can reduce portfolio volatility and potentially enhance returns. Structured notes, for instance, introduce defined outcomes and protection features not found in equities or bonds.
Building a strong portfolio is like constructing a well-designed house—the more quality tools you have, the more resilient it becomes.
To learn more about how these instruments fit within a long-term strategy, visit the Cashbox Global Education Centre.
This content is for educational purposes only and does not constitute financial advice. Always perform your own due diligence or consult a licensed professional before investing.
