Alternative investments taking off amid record low interest rates

NexGen Cloud, the cloud solutions provider, has commissioned an independent survey among 889 UK investors, all of whom have portfolios in excess of GBP10,000, not including any primary property, savings, pensions, or SIPPs. It found that 43 percent are more likely to consider alternative assets to make their money work harder in the current low-interest-rate environment.

A fifth (20 per cent) of investors’ current portfolios are weighted more towards alternative investments than traditional assets, with 23 per cent saying alternative investments will form a key part of their financial strategy in the coming 12 months.
The study also revealed a growing link between alternative investing and investors’ personal interests. Three in 10 (30 per cent) respondents say alternative asset classes present an opportunity to invest in more specialised fields that they are more passionate about and know better.
Real estate is the most common alternative investment among UK investors – 17 per cent hold real estate investments at present, with a further 19 per cent considering investment into this asset over the next year. Cryptocurrencies and collectibles were joint second on the list of the most popular alternative investments (both had backing from 14 per cent of investors).
Elsewhere, NexGen Cloud’s research found that 8 per cent of UK investors have invested in cloud computing infrastructure or data mining, with 18 per cent considering this sector as an area for investment in the year ahead.
Chris Starkey, founder and director, NexGen Cloud, says: “Over the past 18 months, the financial markets have been subject to intense volatility, which combined with record low interest rates, is evidently leading investors to diversify into new areas beyond mainstream assets.
“Clearly, some investors are seeking ways of making their money work harder in the current climate. However, it also interesting to note that investors are also choosing to diversify into asset classes that they feel a greater connection to, which is a positive side of alternative investments that is often overlooked.
“Investors have never had so much choice of how and where to invest their money. Our research shows that many are now embracing the possibilities by finding investments within their areas of expertise or industries they are passionate about.”

Source: WealthAdviser

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The Cambridge Associates LLC US Private Equity Index (CA PE) is a pooled horizon IRR calculation based on quarterly data compiled from 1,496 US private equity funds, including fully liquidated partnerships, formed between 1986 and 2022.

The S&P 500 TR Index calculates both the price movement of the S&P 500 and the dividends that the stocks within the S&P 500 paid.

The methodology behind the calculations focused on establishing parity in the measurement frequency of both indices to a quarterly basis. This adjustment was made due to the fact that investment-level performance information of private equity funds behind the CA PE Index is drawn from the fund managers' quarterly and annual financial statements.

The chart is made for illustrative purposes only, as neither the Cambridge Associates LLC US Private Equity Index nor the S&P 500 Total Return Index can be directly invested in. These indexes are simply measures of the performance of their constituent securities.

Alternative investments taking off amid record low interest rates

Source: WealthAdviser

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