Beyond mainstream investing

You’re probably familiar with property, shares and bonds. But did you know as an investor in the Cornerstone portfolio, you also get access to a range of other assets to diversify your holdings? These include private equity, private credit, real assets and hedge funds.

Together, they fall into the bucket of “alternative investments”.

The idea is that alternative assets often rise in value when other investments fall – providing an extra source of returns, plus a cushion to offset volatility in shares and bonds.

Some Cornerstone portfolios allocate 1%-2% of clients’ capital to alternative assets, while others have up to a 7%-8% allocation.

One example of an alternative asset is a “long volatility” strategy used by hedge fund Amundi. It generated positive returns for the portfolios in 2022 to help offset declines in both shares and bonds.

Another example is private credit manager Metrics, which also provided a level of protection against the falls in traditional markets.

Private credit funds lend money to companies in a similar manner to banks and have grown in size considerably since the global financial crisis. The loans tend to have floating interest rates that rise in line with official rates, which is a key benefit for investors in the current environment of rising interest rates.

Alternative investments generally aren’t listed and can be difficult for retail investors to buy directly, as only a relatively small number are available to individuals. However, Cornerstone’s scale means it can buy investments on your behalf that are otherwise only available to the very biggest investors.

Our team also has the necessary expertise to manage the risks that come with alternative assets, which include the possibility some may experience periods of illiquidity (which makes it difficult to buy or sell).

Cornerstone Financial Group Pty Ltd is a wholly owned subsidiary of Invest Blue Pty Ltd (ABN 91 100 874 744) which is an Authorised Representative and Credit Representative of AMP Financial Planning Pty Limited ABN 89 051 208 327, Australian Financial Services Licence and Australian Credit Licence No. 232706.

This website contains factual information only about the Cornerstone Portfolios. The information provided is not intended to imply any recommendation or opinion about a financial product. This website has not been prepared having regard to any retail investor’s objectives, financial situation or needs. Before making an investment decision, an investor should also consider the latest disclosure document in respect of the Cornerstone Managed Portfolio (‘‘Disclosure Document’’) and / or seek financial advice in deciding whether to make or continue to hold, an investment in the Cornerstone Managed Portfolio. The Disclosure Document can be obtained by contacting a financial adviser or the platform operator(s) offering the Cornerstone Managed Portfolio.

Russell Investment Management Ltd ABN 53 068 338 974, AFS Licence 247185 (RIM) is the Investment Manager of the Cornerstone Managed Portfolios.