Back to: Structured Investments

The key benefits of adding alternative assets to an investment portfolio are:

• Increase investment portfolio returns - investors who choose to take on added risk are rewarded with the opportunity for higher returns
• Reduce overall volatility of returns - investments with little correlation to each other will lower the overall return volatility of a portfolio

Traditional investments such as cash, bonds, listed property and shares have a lower risk and returns profile than structured alternatives. Moving up the risk/return graph, the expected returns from the majority of structured investment products are in the 7 - 10% band in the medium/long term. Most High Yield Funds for example seek to out perform the government bond or bank bill market by some percentage over time – usually 2 - 3%. However, with these higher target returns, comes increased risk.

Every individual has their own risk/return profile, however the important question that this chart highlights is "Am I getting a fair return on a risk adjusted basis?"