Understanding Asset Classes
As the name would suggest, alternative investments are different from mainstream asset classes such as cash, equities and property.
When a SMSF invests in alternatives, it may be seeking to achieve a range of outcomes such as:
- receiving uncorrelated returns, which are returns from asset classes that do not match or correlate to the return profile of mainstream asset classes. In other words, when mainstream asset classes are underperforming, Alternatives may compensate
- investing at an early stage in emerging asset classes to gain a benefit of appreciating asset prices
- investing in collectables