There is potential for higher returns compared to more traditional investments.

Like all investments, there’s no guarantee of returns. Because alternatives may decline in value, there is also a risk to principal.

Alternative investments typically move somewhat differently to the stock market, which means they can add diversification and help mitigate volatility in your portfolio.

Compared to traditional investments, like mutual funds or ETFs, alternative investments usually have much higher fees and carry higher minimum investment thresholds.

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.

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.

Schwab offers third-party alternative investments across the industry's providers.

Alternative investments have complex restrictions for purchasing, have lock-up periods and lengthy holding periods, and are illiquid compared to public markets.

Many alternative investments include assets that can be difficult to value or are less frequently valued when compared to public markets.