What is the AIF (Alternative Investment Fund)?

An alternative investment may be a financial asset that doesn’t fall under one of the traditional investment categories. Conventional categories include stocks, bonds, and cash. Most alternative investment assets are held by institutional investors or accredited, high-net-worth individuals due to their complex nature, lack of regulation, and degree of risk.

KEY TAKEAWAYS:

• An alternative investment may be a financial asset that doesn’t fall under one of the traditional equity/income/cash categories.
• Private equity or risk capital, hedge funds, real estate, commodities, and tangible assets are all samples of alternative investments.
• Most alternative investments are unregulated by the SEC.
• Alternative investments tend to be somewhat illiquid.
• While traditionally for institutional investors and accredited investors, alternative investments have become feasible to retail investors via alt funds, ETFs, and mutual funds that build portfolios of alternative assets.