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Alternative asset classes: risk-return profiles

As alternative investments are generally not traded on an exchange, there are some specific aspects to consider when comparing them to securities, money market instruments and derivatives. First and foremost, alternative investments are much less liquid than traditional assets and tend to have a low correlation with them. Second, the relatively high return and risk potential of these asset classes is often emphasised (see figure).

Source: BAI Fact Sheet Infrastructure (Equity & Debt) 2022.

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