Alternatives at BlackRock

Alternative investments sit outside the traditional asset classes (stocks, bonds and cash) most often used to construct portfolios. Once the domain of institutional investors only, simpler structures, lower investment minimums and greater transparency have democratized access to investments such as private equity, real estate, infrastructure and credit. Alternative investments also include more liquid strategies known “liquid alternatives.”

Advisors and individual investors increasingly see alternatives as a potential way to enhance returns and diversify portfolios. The potential benefits come with risks, as alternatives are often more complex than their public markets counterparts.

Alternative investments are investments beyond traditional stocks, bonds and cash. Private markets and liquid alternatives are two types of alternative investments.

Private markets include investments such as private equity, private credit, infrastructure and real estate that are not typically traded on public exchanges. Liquid alternatives use alternative investment strategies in vehicles that generally offer more frequent liquidity, such as mutual funds or ETFs.

As access expands, investors are seeking out alternatives due to their potential diversification and return benefits. However, some key considerations like liquidity, complexity, and transparency remain important for those including alternatives in portfolios.

Alternative investments can help broaden a portfolio beyond traditional stocks and bonds. They may provide access to different sources of return, income and diversification, and may help portfolios become more resilient across market environments.

Investors can access alternatives through a range of vehicles, including mutual funds, ETFs, interval funds, tender offer funds, private funds, business development companies, real estate investment trusts and customized portfolio solutions.

Access will vary by strategy, vehicle type, investor eligibility, investment minimums and liquidity terms. To learn more about alternative investment vehicles, read here.

Alternative investments may involve risks that differ from traditional investments, including limited liquidity, higher fees, and greater complexity. Investors should carefully consider a strategy’s objectives, risks, fees and liquidity terms before investing.