Alternative Investments: A non-traditional approach to investing.
Explore new ways to help grow, adapt, and diversify your portfolio.
Gain access to strategies beyond public markets with alternative investing.
Alternative investments—such as hedge funds, private equity, private credit, and real estate—cover a range of asset classes, each with their own unique set of characteristics, benefits, and risks. They also provide investors access to strategies that go beyond those available from publicly traded stocks, bonds, and cash investments.
These financial assets use non-traditional approaches to help you meet portfolio goals, including but not limited to capital appreciation, income generation, and portfolio diversification.
Types of alternative investments accessible through Schwab.
Explore the types of alternative investments eligible clients can access through Schwab and how they can serve as strategic roles in building a well-rounded portfolio. In order to be eligible for alternative investments at Schwab, certain qualifications must be met, including having at least $5M in household assets held at Schwab and having been a Schwab client for at least 30 days.
Private equity
Private equity funds pool investor capital to invest in privately held companies, offering potentially higher returns compared to public markets.
Private credit
Investing in private credit involves financing corporate, physical, or financial assets, providing a way to potentially diversify and enhance your public fixed income portfolio.
Hedge funds
Hedge funds invest in traditional public market assets, and utilize strategies like leverage, derivatives, and short selling to pursue their objectives.
Real estate
Real estate funds focus on commercial and residential properties, including apartments, hotels, retail spaces, offices, and industrial buildings.
Exchange funds
Exchange funds involve "exchanging" large, concentrated equity positions for a proportional interest in a basket of diversified stocks rather than selling the securities outright. Note: Exchange funds are subject to product availability, and investor participation in exchange funds may be subject to different eligibility requirements.
BENEFITS AND RISKS
What to consider before investing in alternative investments.
Review potential benefits and risks to determine whether alternative investments align with your goals.
What to consider before investing in alternative investments.
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Potential to enhance returns There is potential for higher returns compared to more traditional investments.
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Potential for higher losses and higher volatility Like all investments, there’s no guarantee of returns. Because alternatives may decline in value, there is also a risk to principal.
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Portfolio risk diversification Alternative investments typically move somewhat differently to the stock market, which means they can add diversification and help mitigate volatility in your portfolio.
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Higher fees and minimums Compared to traditional investments, like mutual funds or ETFs, alternative investments usually have much higher fees and carry higher minimum investment thresholds.
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Professional research Third-party alternative investments offered to clients by Schwab undergo due diligence and ongoing monitoring by an experienced team of Schwab Center for Financial Research (SCFR) analysts.
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Lack of transparency Alternative investments are not listed in open markets, may not be regulated, and can include investment holdings and trading methods that aren't required to be publicly disclosed. In addition, alternative investments may not provide the same level of reporting and transparency as other traditional investments.
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Trusted choices Schwab offers third-party alternative investments across the industry's providers.
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Illiquidity and longer holding periods Alternative investments have complex restrictions for purchasing, have lock-up periods and lengthy holding periods, and are illiquid compared to public markets.
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Uncertain valuation Many alternative investments include assets that can be difficult to value or are less frequently valued when compared to public markets.
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Ready to learn more about alternative investments?
Talk to your Schwab Investment Professional or visit a Schwab branch to learn more about Schwab Alternative Investments Select.
Learn about our personalized approach to wealth management.
Common questions
Alternative investments are non-traditional investments, distinct from more traditional assets, such as publicly traded stocks, bonds, and cash investments.
These financial assets use non-traditional approaches and cover an array of alternative asset classes, including real estate, private equity, private credit, and hedge funds.
Talk to your Schwab Investment Professional to discuss how alternative investments might fit into your overall financial strategy.