Alternative investments are assets that fall outside the traditional categories of shares, bonds, and cash. They include gold, commodities, infrastructure, private equity, hedge funds, real assets, and more. For Australian investors, alternatives can provide diversification, inflation protection, and returns with low correlation to the share market — though they typically come with higher complexity, lower liquidity, or higher fees.
What Are Alternative Investments?
The alternative investment category is broad — encompassing any investment that isn’t a standard listed share, government bond, or cash deposit:
| Category | Examples | Australian access |
|---|---|---|
| Gold and precious metals | Physical gold, gold ETFs | GOLD (ASX), PMGOLD (ASX), physical bars/coins |
| Commodities | Oil, agricultural products, metals | QCB, CMOD ETFs; commodity company shares |
| Cryptocurrency | Bitcoin, Ethereum, others | CRYP, EBTC ETFs; crypto exchanges |
| Private equity | Unlisted companies, venture capital | Listed investment companies, PE funds |
| Hedge funds | Long/short, macro, arbitrage strategies | Wholesale only (generally) |
| Unlisted infrastructure | Toll roads, airports, pipelines | Super funds, listed infrastructure ETFs |
| Listed infrastructure/REITs | Transurban, Sydney Airport (delisted), APA Group | ASX directly; VBLD, GLIN ETFs |
| Collectibles | Art, wine, classic cars, watches | Direct purchase only |
| Peer-to-peer lending | Loans to individuals/businesses | P2P platforms (limited in Australia) |
| Hedge commodities / real assets | Farmland, timber | Wholesale; some listed options |
Why Consider Alternatives?
Diversification: Many alternatives have low or negative correlation with Australian shares — their prices don’t move in sync with the ASX. Adding alternatives may reduce portfolio volatility.
Inflation protection: Gold, commodities, and real assets (infrastructure, property) have historically maintained value during periods of high inflation.
Return enhancement: Some alternatives (private equity, venture capital) have historically delivered higher returns than public markets over long periods, at the cost of illiquidity.
Income: Infrastructure assets and real assets generate predictable cash flows — toll revenues, pipeline tariffs, utility revenues.
Key Risks of Alternatives
- Liquidity: Many alternatives are illiquid — you cannot sell quickly at a fair price
- Complexity: Understanding alternative risks requires more research than a standard ETF
- Fees: Alternative fund managers typically charge significantly higher fees than index ETFs
- Valuation uncertainty: Unlisted assets are not priced daily — valuations may be stale
- Regulatory risk: Cryptocurrency and some P2P lending sectors face evolving regulation
In This Section
| Article | What it covers |
|---|---|
| Gold Investing Australia | How to invest in gold in Australia; physical vs ETFs; gold’s portfolio role |
| Commodities Australia | Commodity investing on the ASX; ETFs; commodity-linked shares |
| Cryptocurrency Investment Australia | Crypto as an investment asset (general info); Bitcoin, Ethereum; tax treatment; ASX ETFs |
| Private Equity Australia | How to access private equity in Australia; LICs; wholesale PE funds |
| Hedge Funds Australia | What hedge funds do; access for retail investors; costs and risks |
| Collectibles and Art Investing Australia | Art, wine, watches, classic cars — what to know before investing |
| Peer-to-Peer Lending Australia | How P2P lending works in Australia; risks; current landscape |
| Unlisted Infrastructure Australia | Unlisted infrastructure investing; access via super; listed alternatives |
| How to Access Alternatives via ETFs Australia | ASX ETFs for gold, commodities, crypto, infrastructure — practical access to alternatives |
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This article provides general financial information only. For advice tailored to your situation, speak with a licensed financial adviser through the ASIC financial advisers register or MoneySmart.