The rapid spread of coronavirus has impacted markets across the globe. All businesses except essential commodities have been asked to operate remotely. Even financial services companies are functioning with minimal resources. With market volatility on full swing, alternative investment assets are increasingly gaining popularity among investors.
The wrath of the pandemic has impacted investor sentiment as well, with the market witnessing the biggest sell-off by foreign investors of $16 billion worth of equity and debt in a single month. With a 30% drop in the quarter finished March, India’s indices experienced a record low since 2009. The soaring market volatility and panic sell-off have hurt the market, ultimately setting the global recession clock starts ticking.
For financial specialists, the instant knee-jerk response and the subsequent market aftermath is an indication that volatility is going to persist until the pandemic reaches a controllable level.
Considering the current market condition, investors should look out for alternative funds as a valuable asset class. Here are the 4 alternative investment funds you should look out for during the pandemic.
Traditionally, gold is a safe investment avenue, particularly during the financial recession. It is because the metal has an intrinsic value. For instance, the recent upheaval in the market moved gold prices to plummet by 0.84 per cent or Rs 381 to Rs 45,675 per 10 grams.
During market downturns, gold is viewed as a safe alternative asset class for protecting and diversifying portfolios for preserving the value of assets. This encourages speculative buying of gold as investors diversify out of other riskier investments. Investors can think of investing in gold ETFs – a passive investment vehicle that is based on price movements and investments in physical gold.
2 Invoice Discounting
A brand new asset class, invoice discounting has emerged as a sought-after investment avenue for investors looking to diversify their portfolio. Invoice discounting is considered as a safe investment option to safeguard portfolios against market volatility while reaping high returns.
KredX’s invoice discounting platform allows investors with a unique opportunity to make low-risk and high-returns investment within 30-90 days. The KredX platform offers an alternative, short-term investment product that provides lucrative returns at minimal risk.
Also Read: Alternative Investments – The Next Big Thing
Considering the current market scenario, investors can venture into other asset classes that remain untethered during the recession. Cryptocurrency is another stock market alternative that investors can look out for during market downturns. As per the research firm Markets and Markets, the global cryptocurrency market size is estimated to reach $1.40 billion by 2024, at a CAGR of 6.18%. With the current market fluctuations and a looming worldwide downturn put cryptocurrency among the best alternative ventures.
In the course of recent years, rapid developments in the global monetary condition have pushed asset management to the front line of social and economic change. The requirement for increased and sustainable investment became all the more crucial to navigate market downturns. The 2020s will see radical shifts in the asset management landscape.
The ongoing pandemic will leave a lingering impact on the market with investors being speculative about investment. In such circumstances, investing in alternative assets will safeguard investor interest. For investors looking to capitalize on this burgeoning industry, alternative assets could be a good place to start.