New Investable Asset Classes

I’ve been closely following the evolution of technology democratizing investing as well as increasing access to services that were historically reserved for high net worth individuals. Companies such as Wealthfront, Betterment, and Republic have been offering the masses access to services and investment opportunities not widely available before the tech era. I see this trend continuing thanks to the JOBS Act, which while not perfect is at least a directional improvement for the average investor who seeks the ability to invest in opportunities where they don’t necessarily have to be an accredited investor.

What excites me moving forward are new asset classes that fall outside of the traditional buckets.

The graph on the left constitutes, at a high level, the major asset class buckets. However, technology and changes in regulation are moving us to an opportunity set that might look like the pie graph on the right, a world where new types of assets are becoming investable by anyone and potentially become as liquid as a stock trading on a major exchange.

Companies such as Rally Road, Mythic, and Masterworks are among the pioneers pushing us into this new investment landscape. The one I find most interesting though, is Otis. It is unique in the it is initially focusing on art and collectibles that either are or have a chance to become meaningful assets within a particular cultural context. For example, their first asset launch, Kehinde Wiley’s Saint Jerome Hearing the Trumpet of Last Judgement offers anyone access to the work of an artist on the upswing after getting commissioned by the Smithsonian to paint portraits of the Obamas in 2017. If this piece is any indication of things to come, we can expect assets to become available that have an appeal based in deep cultural context, whether its something specific to race, pop culture, or socio-economic status

This type of approach will certainly appeal to “overlooked” investors and I believe will also draw in new investors who, for whatever reason, are not drawn to the traditional world of stocks and bonds (if you’re not a Wall Street type I don’t blame you at all!). Lastly, as every investor should know, these assets will increase one’s portfolio diversification. I expect within the next 5-10 years, there will be many more active investors choosing from a much larger set of assets globally, and in turn be much more in touch with the objects, sounds, and stories that define us as people.

One thought on “New Investable Asset Classes

  1. “Bitcoin is consistently the lowest correlated asset to other traditional asset classes,” says Chris Burniske, blockchain analyst at ARK Investment Management, the first public fund manager to invest in Bitcoin, and co-author of the paper, “ Bitcoin: Ringing the Bell for a New Asset Class .”

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