A COMPARATIVE ANALYSIS OF TRADITIONAL AND ALTERNATIVE ASSET CLASSES

Abstract

The research undertaken is a descriptive study with an emphasis on comparing various asset classes: traditional (equity shares, corporate bonds, government securities) and alternative (private equity, commodities). Based on historical data and prospects, various aspects such as past performance, rates of return, volatility, liquidity, and regulatory framework were analysed and concluded. It was found that alternative assets depict a higher performance potential than traditional assets, but are not as consistent as the latter. Within the traditional category, shareholding generated superior returns than debt instruments. Alternative assets also have higher volatility and associated risk, along with lower liquidity than traditional assets. Regulation is tighter for publicly traded assets than for privately traded. Both categories do not appear to show much correlation with each other.