7 Best Alternative Investments of 2025

Alternative investments are assets that fall outside traditional categories like stocks, bonds, and cash. They often include physical assets (real estate, gold), private market instruments (private equity, hedge funds), or digital assets (crypto).

These investments typically behave differently from traditional assets and can be useful for portfolio diversification or inflation hedging.

Before diving into alternative investments, start by identifying the asset class you’re interested in, whether it’s for income, diversification, or long-term growth. 

For more accessible investment options like REITs, ETFs, and certain commodities, consider using MAS-regulated platforms such as Syfe, Endowus, Tiger Brokers, or DBS Vickers. If you're interested in cryptocurrency, stick to MAS-notified exchanges like Coinhako, Luno, or Gemini to ensure regulatory compliance.

For more complex products — such as private equity or hedge funds — note that these typically require Accredited Investor status. You’ll also want to check whether the product is classified as a Specified Investment Product (SIP), which may require you to complete a Customer Knowledge Assessment (CKA) or Customer Account Review (CAR) before you can invest.

Don’t forget to be mindful of fees, tax implications (e.g., crypto business income), and liquidity restrictions.

» More : 5 types of alternative investments you can add to your portfolio

Bitcoin, Ethereum, and other cryptocurrencies are decentralised digital assets that offer the potential for high returns — but also come with high volatility.

In Singapore, you can buy and sell crypto through MAS-notified platforms like Coinhako, Gemini, or Luno. 

Do note that MAS has issued warnings about the risks involved, so only invest if you understand the volatility and have a high risk tolerance.

» More : How to buy cryptocurrency in Singapore: what investors should know

Real estate exposure doesn't require buying property outright. Real Estate Investment Trusts (REITs) are listed on SGX and offer an affordable way to invest in commercial, industrial, or retail properties.

You can invest in REITs through platforms like Syfe REIT+, Endowus, or POEMS. REITs pay high dividends and provide greater liquidity than physical real estate.

» More : Guide to real estate investment trusts (REITs), and whether you’re ready for it

This involves investing in private companies that aren't listed on the stock exchange. It’s often accessed through venture capital or growth equity funds.

In Singapore, platforms like Alta and CapBridge serve Accredited Investors. Private equity is high risk and requires a long-term outlook, but can offer strong returns.

» More : 4 best ways to invest S$1 million in alternative investments

Hedge funds are pooled investments managed by professionals using advanced strategies like leverage, arbitrage, or short-selling.

In Singapore, they're usually only accessible to Accredited Investors and require a high minimum capital (typically S$250,000 or more). While they can offer high returns, they also carry high fees and low transparency.

» Explore the best ways to invest money in 2025

Commodities include physical goods like gold, oil, and agricultural products. They can help hedge against inflation and diversify your portfolio.

Gold investment options in Singapore include the UOB Gold Savings Account, physical bullion, or SGX-traded ETFs like SPDR Gold Shares. Prices can be volatile due to global factors.

» Learn how to take advantage of the commodity “supercycle”

Think art, whisky, vintage watches, or sneakers. These tangible assets can appreciate over time, but require specialised knowledge and are usually illiquid.

In Singapore, collectibles can be bought at auctions or from dealers. Be prepared to research thoroughly, and ensure proper authentication and storage.

Structured products are custom investments that combine bonds with derivatives to deliver specific outcomes based on an underlying asset.

Common types in Singapore include:

• Capital-protected notes

• Dual-currency investments

• Equity-linked notes

• Index-linked notes

These are typically offered by banks like DBS, OCBC, and UOB. Additionally, they may require CKA/CAR clearance or Accredited Investor status.

Pros

Alternative investments offer several potential benefits that can enhance your overall portfolio. One of the biggest advantages is greater diversification. These assets often behave differently from traditional stocks and bonds, helping to spread out risk. They also provide access to non-traditional income streams, such as rental income from REITs or dividend payouts from private equity.

In some cases, alternative assets offer the potential for higher returns than conventional investments, particularly when chosen wisely and held over the long term. Additionally, certain alternatives like gold and commodities can serve as a hedge against inflation and market volatility, offering more stability during uncertain economic periods.

Cons

While alternative investments have their benefits, they also come with some drawbacks to keep in mind. First, they can be riskier than traditional investments like stocks or bonds. The value of some assets like crypto or collectibles can change quickly and unpredictably.

Many alternative investments are also harder to sell. Unlike stocks, which you can sell almost instantly, it might take time to cash out from things like real estate or private equity.

There’s also less regulation, which means fewer protections for everyday investors. On top of that, some investments like gold or fine art may require special storage or handling, which adds extra cost and hassle.

Your current portfolio will determine the appropriate stock alternatives. A well-diversified stock portfolio can help most people accumulate wealth over time. 

You can compare the historical returns of alternative investments to the regular market if your portfolio is already doing well and you're looking for something extra to support it.

If you're looking to diversify away from stocks, one popular option in Singapore is investing in REITs (Real Estate Investment Trusts). These offer exposure to property assets — such as malls, offices, or logistics hubs — without the need to buy a physical building.

Take CapitaLand Integrated Commercial Trust (SGX: C38U) for example. It owns and manages major properties like Plaza Singapura, Raffles City, and IMM. As of 2024, it offered a dividend yield of about 5%, making it a reliable source of passive income for investors looking for stability and regular payouts.

» More : What investment diversification means and how it works

Alternative investments can be exciting, and they can help diversify your portfolio, but they also come with particular challenges and risks. If you’re curious about alternative investments, it’s worth doing your homework to see how they might complement your existing investment portfolio.

If you don’t already have an investment portfolio composed of more traditional assets, it may be better to focus on building that first.

» More : Investment strategies for new investors