In plain words: Real estate and other assets that don't always move in step with shares and bonds.
REITs and alternatives is a broad bucket covering real estate (often through listed property vehicles) and other assets that behave differently from mainstream shares and bonds. As an asset class, its appeal is variety: these holdings don't always rise and fall at the same time as the rest of a portfolio.
Why include assets that move differently?
When one part of a portfolio dips, another that moves on its own rhythm may hold up. That cushioning effect is the main reason this asset class appears in example allocations — it adds variety alongside shares and bonds. The aim is a smoother overall ride, not a guarantee of gains.
How large a slice is typical?
Because these assets can be less liquid or harder to value, example portfolios usually frame them as a modest, supporting slice rather than a core holding. A profile that wants extra diversification might lean slightly more on them, always within the curated ranges of an asset allocation.
Key takeaways
- This class covers real estate and other non-mainstream assets.
- It often moves out of step with shares and bonds, adding diversification.
- It usually appears as a modest, supporting slice of a portfolio.