With demand for alternative assets set to grow by 46% in the next 12 months – and the value of the alternatives market due to reach $23.21 trillion by 2026 – investments classed as ‘alternative’ are increasingly becoming a mainstream feature of the global investment landscape. Despite this surge – driven primarily by institutional investors and high-net-worth individuals – many investors remain unfamiliar with the size and scope of the alternatives market.
However, current factors at play – high inflation, the impact of the pandemic and the war in Ukraine, for example – mean that market conditions in the next few decades may look somewhat different to the last. Have you taken the opportunity to re-examine your portfolio and explore the potential opportunity provided by alternatives?
Encompassing any investment that isn’t part of the traditional asset classes of cash, stocks and bonds, alternative investments are increasingly forming an essential component of any well-diversified international investment portfolio. In this post, we explore 4 alternative investment opportunities that capitalise on current market conditions – and explain how Lawsons Wealth can help you leverage them to help you navigate successfully through uncertain times.
1. Invest in real estate to capitalise on the housing shortage
Given the chronic shortage of housing across most major developed markets, we predict that real estate will remain an attractive alternative asset class – one that delivers both equity and income in rent. Plus, due to the low correlation between the property market and equities, a property investment offers protection against market volatility and the potential of an alternative income stream that future proofs against inflation.
Through collaboration with an exciting range of established providers, Lawsons Wealth gives you the opportunity to invest across sectors from residential (including social housing) to commercial, hospitality and logistics in both the UK and the US. As a result, you’ll access short and long-term opportunities including:
- Traditional property investments and property portfolio management including buy-to-lets – for example, those with API Global, Alliance Investments and Joseph Mews
- Property investment with inflation-effective payment plans – Prosperity Wealth offers a unique purchasing model where fixed payments for the deposit are made over the period of the build, while the underlying value of the property may be simultaneously increasing
- Green real estate investments and regeneration projects
- Income-assured social housing investments – with Yield Investing, properties are sold with tenancy leases to the UK government, and the rents you receive are pegged to inflation
- US land asset management opportunities – Walton offers geographic diversification along with the chance to invest at different stages of the investment cycle
2. Ensure your portfolio includes structured products
Structured products give you the opportunity to benefit from market volatility, whether stocks are going up or down. Different types of notes offer a variety of ways to receive income – granting you greater flexibility in how you make your returns while offering a level of down-side protection.
At Lawsons Wealth, we give you access to a range of structured products, including those provided by Causeway Securities, Portman Associates and IDAD – your adviser will recommend a product that’s tailored to your objectives.
3. Embrace short-term products with a fixed income
Short-term fixed income products are an essential element of a diversified portfolio at times of high inflation, as they give you access to a strong yield and a robust level of security on your investment.
- CGW offer fixed-income bonds – delivering a strong yield and a robust level of security
- Alternative strategists Capital 3PM give international investors access to an unparalleled suite of fixed income loan notes – spanning both the property and legal sectors
4. Consider commodities and energy for a well-rounded portfolio
Finally, every Lawsons Wealth model portfolio includes commodities and energy – gold and renewables, for example – to ensure it’s diversified. In this context, it’s worth noting that we have a particular focus on ESG, ensuring each portfolio is sustainably focused at a deeper level than simply a fund name.
Of course, all investments, alternatives included, carry a level of risk. If you’re unsure about which investments match your approach – or which are the best options to achieve your financial objectives – you should consult an expert. And even if you’re an experienced international investor, a second opinion could give you the opportunity to explore options you hadn’t previously considered.
At Lawsons Wealth, we provide expert independent financial advice and access to wealth management solutions that give you the freedom to live the life you want. To find out more about how we’ll help you diversify your portfolio with alternative investments, get in touch with our expert team.
