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Alternative investments refer to any type of investment that is not common equity or fixed income. These include hedge funds, private equity, venture capital, real estate, infrastructure and others. Investors who want to invest in alternative investment funds can do so by opening an Alternative Investment Fund (AIF) account with any registered Alternative Investment Fund Manager (AIFM).
Alternative investment funds (AIFs) have gained enough traction to become the next big thing in the Indian investments space. With retail investors looking for higher returns and a new asset class, alternative investments are fast catching up with retail investors and institutional investors.
What are the Benefits of Investing in Alternative Investments?
Alternative investments can be a valuable tool for building retirement savings and the benefits below are just some of the ways in which these types of investments can help diversify and grow retirement savings over time.
Alternative investments are not the same as traditional investments. They are more risky and they can provide higher returns. However, they also have a higher chance of losing money.
There is a long list of benefits that comes with investing in alternative investments.
- These types of investments can help diversify your portfolio and reduce volatility.
- You will be able to participate in opportunities that you would not be able to do with traditional investments.
- Investing in alternative investments will allow you to have access to certain assets which are not available through traditional investment options like real estate, private equity, hedge funds and commodities.
- Alternative investments offer higher expected returns than those offered by traditional investments.
How to Choose the Best Alternative Investment Fund for You?
Choosing the best AI fund can be a difficult task. You have to consider many factors including the risk, return and diversification.
When choosing an AI fund, it’s important to consider the following:
- What is the level of risk?
- What is your time horizon?
- How much money do you want to invest?
There are many different types of funds that you can invest in, the two most popular types being equity funds and bond funds. Equity funds are more risky because they typically invest in stocks and bonds, which can fluctuate in price. Bond funds are less risky because they invest primarily in fixed-income securities that have a low rate of fluctuation.
Alternative Asset managers are often challenged by fragmented markets, legacy tech, disparate systems, and cost pressures. KFintech’s proprietary Alternative Investment Platform is designed to be the backbone of alternative investment funds, enabling fund managers to run fund operations smoothly, on board investors and scale their operations as they grow. Know more here.
