{"id":664,"date":"2019-09-15T17:32:00","date_gmt":"2019-09-15T17:32:00","guid":{"rendered":"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=664"},"modified":"2026-02-17T09:58:54","modified_gmt":"2026-02-17T09:58:54","slug":"categories-alternative-investments","status":"publish","type":"post","link":"https:\/\/analystprep.com\/cfa-level-1-exam\/alternative-investments\/categories-alternative-investments\/","title":{"rendered":"Categories of Alternative Investments"},"content":{"rendered":"\n<script type=\"application\/ld+json\">\n{\n  \"@context\": \"https:\/\/schema.org\",\n  \"@type\": \"VideoObject\",\n  \"name\": \"Introduction to Alternative Investments (2019 Level I CFA\u00ae Exam \u2013 Reading 50)\",\n  \"description\": \"CFA Level I Alternative Investments lesson covering comparison of alternative vs traditional investments, categories of alternatives, hedge funds, private equity, real estate, commodities, infrastructure, fee structures, valuation issues, risk management, and portfolio diversification benefits.\",\n  \"thumbnailUrl\": \"https:\/\/img.youtube.com\/vi\/9PNi1_uo4Gg\/maxresdefault.jpg\",\n  \"uploadDate\": \"2019-11-19\",\n  \"duration\": \"PT24M55S\",\n  \"contentUrl\": \"https:\/\/www.youtube.com\/watch?v=9PNi1_uo4Gg\",\n  \"embedUrl\": \"https:\/\/www.youtube.com\/embed\/9PNi1_uo4Gg\"\n}\n<\/script>\n<script type=\"application\/ld+json\">\n{\n  \"@context\": \"https:\/\/schema.org\",\n  \"@type\": \"QAPage\",\n  \"mainEntity\": {\n    \"@type\": \"Question\",\n    \"name\": \"Which of the following would most likely be categorized as an investment in commodities?\",\n    \"text\": \"Which of the following would most likely be categorized as an investment in commodities?\\n\\nA. Wayne Gretzky\u2019s National Hockey League rookie card\\n\\nB. Three ounces of pure gold coins\\n\\nC. Residential REITs\",\n    \"answerCount\": 1,\n    \"acceptedAnswer\": {\n      \"@type\": \"Answer\",\n      \"text\": \"The correct answer is B. Gold is a commodity. A Wayne Gretzky rookie card would be categorized as an \u201cother\u201d collectible, and residential REITs are real estate investments.\"\n    }\n  }\n}\n<\/script>\n\n\n\n\n<p>\n  <iframe loading=\"lazy\"\n    src=\"\/\/www.youtube.com\/embed\/9PNi1_uo4Gg\"\n    width=\"611\"\n    height=\"343\"\n    allowfullscreen=\"allowfullscreen\">\n  <\/iframe>\n<\/p>\n\n\n\n<p>With no true consensus as to any \u201cofficial\u201d categories of alternative investments, it\u2019s still useful to present a list to aid in your understanding.<\/p>\n<p><strong>Hedge Funds<\/strong> are private equity funds that hold a variety of traditional and alternative assets, long-and-short positions, often-high leverage, and seek absolute return for its investors.<\/p>\n<p><!--more--><\/p>\n<p><a style=\"display: block; margin: 20px 0 28px; padding: 14px 18px; border: 2px solid #2563eb; border-radius: 12px; text-align: center; color: #2563eb; text-decoration: none; font-weight: 500; font-size: 15px; background-color: #ffffff;\" href=\"https:\/\/analystprep.com\/free-trial\/\" target=\"_blank\" rel=\"noopener noreferrer\"> Practice alternative investment category questions. <\/a><\/p>\n<p><strong>Private equity funds<\/strong> invest in non-publicly-traded (\u201cprivate\u201d) companies, often with leveraged buyouts (LBOs) of profitable and cash-generating companies.\u00a0 Venture capital is a subset of private equity, where investors provide start-up capital and equity financing for young companies.<\/p>\n<p><strong>Real estate<\/strong> is the investment in buildings, land, farms, and timberland through a variety of vehicles including ownership, mortgages, public equity (REITs), and mortgage-backed securities (MBS).<\/p>\n<p><strong>Commodities <\/strong>investments are physical goods such as oil, metals, and agricultural products along with their underlying securities such as forwards, futures, and investments in firms that deal in the commodities business.<\/p>\n<p><strong>Infrastructure <\/strong>investments are things like roads, bridges, toll networks, dams, and similar capital-intense projects.\u00a0 Investors seeking infrastructure assets often use firm equity, bond issues, and other financial vehicles attached to these large projects.<\/p>\n<p><strong>Other <\/strong>alternative investments could include fine art, racing horses, rare automobiles, coinage, baseball cards, and anything worth collecting.<\/p>\n<blockquote>\n<h2><strong>Question<\/strong><\/h2>\n<p>Which of the following would most likely be categorized as an investment in commodities?<\/p>\n<p>A. Wayne Gretzky\u2019s National Hockey League rookie card<\/p>\n<p>B. Three ounces of pure gold coins<\/p>\n<p>C. Residential REITs<\/p>\n<p><strong>Solution<\/strong><\/p>\n<p>The correct answer is B.<\/p>\n<p>Gold is a commodity.\u00a0Wayne Gretzky\u2019s National Hockey League rookie card would be categorized as others while residential REITs are real estate investments.<\/p>\n<\/blockquote>\n<p><em>Reading 58LOS 58b:<\/em><\/p>\n<p><em> describe categories of alternative investments<\/em><\/p>\n<div class=\"notes_inv\"><hr \/>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/alternative-investments\/learning-sessions-curriculum-alternative-investments\/\"><em>Alternative Investments &#8211; Learning Sessions<\/em><\/a><\/p>\n<\/div>\n<div style=\"text-align: center; margin-top: 32px;\"><a style=\"display: inline-block; padding: 16px 40px; background-color: #2563eb; color: #ffffff; text-decoration: none; border-radius: 14px; font-weight: bold; font-size: 17px;\" href=\"https:\/\/analystprep.com\/free-trial\/\" target=\"_blank\" rel=\"noopener noreferrer\"> Start Free Trial \u2192 <\/a><\/div>","protected":false},"excerpt":{"rendered":"<p>With no true consensus as to any \u201cofficial\u201d categories of alternative investments, it\u2019s still useful to present a list to aid in your understanding. Hedge Funds are private equity funds that hold a variety of traditional and alternative assets, long-and-short&#8230;<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[11],"tags":[],"class_list":["post-664","post","type-post","status-publish","format-standard","hentry","category-alternative-investments","blog-post","no-post-thumbnail","animate"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Types of Alternative Investments | CFA Level I<\/title>\n<meta name=\"description\" content=\"Learn the main types of alternative investments for CFA Level I, including hedge funds, private equity, real estate, commodities, and infrastructure.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, 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