INSIGHTS FROM CFA SOCIETY SINGAPORE
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As alternative investments go mainstream, investor education is a must

The rapid push to make alternatives widely available to individual investors raises significant concerns about due diligence, risk perception, and investor education

    • The 60/40 portfolio (60% equities, 40% bonds) needs to be bolstered by asset classes with different return profiles and whose correlations support wider diversification.
    • The 60/40 portfolio (60% equities, 40% bonds) needs to be bolstered by asset classes with different return profiles and whose correlations support wider diversification. PHOTO: PIXABAY
    Published Tue, Mar 4, 2025 · 04:42 PM

    IN RECENT years, alternative investments – such as private equity (PE) and hedge funds – have surged into the mainstream financial landscape. Traditionally preferred by large endowments and sovereign funds, these asset classes are increasingly accessible to individual or retail investors. This democratisation promises enhanced diversification, attractive return potential, and risk reduction.

    In Asia and Singapore specifically, we have seen a series of new digital offerings putting pressure on banks, which have rushed to embrace this asset class. However, the rapid push to make alternatives widely available to individual investors raises significant concerns about due diligence, risk perception, and investor education.

    As the industry embraces innovation, it must balance growth with responsibility to ensure that the benefits do not come at the expense of investor security.

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