The biggest contributors to performance aren’t always the obvious ones.
Backup quarterbacks have accounted for roughly 16% of Super Bowl wins since 1967. Doug Williams, a backup for the Washington Redskins (now Commanders), started just twice in the 1987 season before throwing four touchdown passes in a Super Bowl rout of the Denver Broncos.
Investing can work the same way.
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Most portfolios are anchored in stocks and bonds. That’s a sound foundation, but it may not be enough going forward. Return expectations in the coming years for traditional asset classes have moderated. In its new “Capital Market Assumptions” report, T. Rowe Price projects five-year returns of 6.8% for global stocks and 3.1% for global bonds. By comparison, the firm is more optimistic about parts of the alternatives market, including private real estate (8.9%), private credit (9.2%) and private equity (9.8%).
Jeffrey Rosenberg, senior portfolio manager at BlackRock Systematic Fixed Income, comments, “A well-constructed allocation should also include diversifying liquid alternatives, especially strategies designed to generate return streams that are less dependent on traditional stock and bond market direction.”
For investors building portfolios with a long-term view, alternative investments are worth a closer look:
— Private credit.
— Private equity.
— Real assets.
— Delaware Statutory Trusts (DSTs).
— Digital assets.
Private Credit
When banks pulled back from lending after the 2008 financial crisis, private lenders stepped in and never left. Today, private credit is a multitrillion-dollar market, generating income by lending directly to businesses, often with yields in the 8% to 12% range.
The appeal is straightforward: Most loans are floating-rate, so income can rise alongside interest rates, unlike traditional bonds.
That said, the asset class has faced scrutiny. Early this year, rising defaults, liquidity concerns and redemption pressures made headlines. Bill LeBoeuf, managing director and senior portfolio manager at Compound Planning, suggests, “The headlines are really punishing private credit, but fund sponsors and industry veterans are adamant that underwriting and valuations are intact, and despite several high-profile defaults, the vast majority of credits in the top funds are good.”
The takeaway: Private credit is a sponsor-driven space. Manager selection matters as much as the asset class itself.
Private Equity
Private equity remains an appealing option for investors willing to trade liquidity for return potential.
Rather than investing in public markets, private equity funds acquire, improve and eventually sell businesses, typically over a five-to-10-year period. Returns are driven by operational improvements, growth initiatives and disciplined exits.
There are trade-offs, though. Capital is locked up for years, performance varies widely by manager and timing matters. Still, for investors with a long-term horizon, private equity offers return potential that can be difficult to replicate in public markets.
Doug Krupa, partner and head of global wealth solutions in the Americas for KKR, adds, “Private markets can be more tax-efficient than many investors realize. Strategies like private equity and infrastructure are oriented around long-term value creation, and the tax code rewards that patience.”
Real Assets
Not everything valuable trades on an exchange.
Infrastructure assets, like roads, pipelines, data centers and farmland, can generate income while helping preserve purchasing power. Many infrastructure investments have revenues tied to inflation through contracts or regulated pricing.
Farmland adds a dual benefit of land appreciation and crop income, and it has historically served as a reliable inflation hedge.
These are long-duration investments. They require patience, but for investors seeking stability and income tied to real-world assets, they can play a meaningful role.
[Read: 7 Best Infrastructure ETFs to Buy in 2026]
Delaware Statutory Trusts (DSTs)
For real estate investors, capital gains taxes can be a bigger hurdle than the market itself.
A 1031 exchange allows investors to defer capital gains taxes, but the 45-day identification window can sometimes make finding a replacement property a challenge. Delaware Statutory Trusts (DSTs) provide an alternative by allowing investors to exchange into fractional ownership of institutional-quality real estate.
Under IRS Revenue Ruling 2004-86, DSTs qualify as like-kind property. Investors can defer taxes, access larger assets — such as multifamily, industrial or necessity retail — and avoid day-to-day management responsibilities.
The trade-offs include illiquidity, long holding periods (typically five to seven years) and accredited-investor requirements. For the right investor, however, DSTs can be an efficient planning tool.
Digital Assets
Ignoring digital assets in 2026 is no longer a conservative decision. It’s an incomplete one.
The approval of spot Bitcoin and Ethereum ETFs has made access easier and more regulated, lowering barriers for many investors. Bitcoin’s fixed supply continues to support its scarcity-driven narrative, and institutional adoption has followed.
Volatility remains the key risk. Drawdowns of 50% or more have occurred multiple times in recent years.
For most investors, this is a question of sizing, not conviction. A 1% to 3% allocation can provide exposure without dominating overall portfolio risk.
Access Matters: Public vs. Private Opportunities
Not every alternative investment is available to every investor, and that’s by design.
Many private market investments, including private equity, private credit funds and DSTs, are typically limited to accredited investors. These opportunities often involve higher minimums, less liquidity and longer holding periods.
Access, however, has expanded recently. Publicly traded real estate investment trusts, interval funds, non-traded business development companies and spot cryptocurrency ETFs now provide broader exposure to alternative strategies. At the same time, newer platforms offering fractional ownership in farmland, art and other real assets have lowered minimum investment thresholds.
The trade-off is structure. Public vehicles generally offer greater liquidity and transparency but may not fully replicate the return profile of private investments.
Putting It All Together
Doug Williams wasn’t the headline going into Super Bowl XXII, but he changed the outcome of the game and was named MVP.
Alternative investments can play a similar role in a portfolio. They’re not always the centerpiece, but in the right environment, they can drive results in ways traditional assets may not.
“The key consideration is not simply whether an alternative investment offers attractive long-term return potential, but whether the liquidity profile, time horizon and portfolio role are well matched to the investor’s broader objectives and constraints,” says BlackRock’s Rosenberg.
In 2026, building a resilient portfolio means expanding your toolkit — whether that’s generating income through private credit, deferring taxes through a DST or adding inflation protection through real assets.
While the opportunity set is broader — and more accessible — than it has ever been, the key is being intentional about how alternative investments fit into your overall plan.
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5 Alternative Investments Every Investor Should Consider in 2026 originally appeared on usnews.com
Update 04/28/26: This story was previously published at an earlier date and has been updated with new information.