FYI: Earlier this week, I explored how financial innovation and the fintech revolution have resulted in the creation of true alternative investments that offer both diversification benefits and equitylike returns. While these sources of risk and return aren’t really new, they are newly investable, thus giving access to different return streams that can materially improve the odds of achieving financial goals.
Previously I examined the rationale for incorporating reinsurance into a portfolio. Today I will look at the merits of including an allocation to alternative lending (consumer, small business and student loans). Here, too, forward-looking expected net-of-fee returns are equitylike (6-8%).1
Regards,
Ted
http://www.etf.com/sections/index-investor-corner/swedroe-benefits-alternative-lending?nopaging=1
