Most alternative investment assets are held by institutional investors or by accredited, high-net-worth individuals and, according to Preqin, now total $6 trillion. Alternative investments include hedge funds, managed futures, real estate, commodities and derivatives contracts.
But alternative investments aren’t just for institutions any longer. According to Morningstar alternatives investment analyst Josh Charney, $38.7 billion flowed into alternative investment mutual funds and ETFs over the year ended April 30, 2014. That’s roughly a 36% increase over the prior year and more than a 100% increase over the past two years. Alternative fund assets now comprise about $150 billion. Still, it’s a drop in the bucket compared to the total of all long-term funds of $11.3 trillion.
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