UniFi by CAIA Crossing the Threshold - 29

Inflation Protection
While public equities have historically been one of the best asset classes for inflation
protection, they're not the only ones. Clients seeking inflation protection can add
alternative assets that have prices or cash flows that have historically had a positive
relationship with inflation-such as real estate, infrastructure, timberland, and other
real assets, as well as commodities.
Positive Impact
If investors have non-financial goals such as making a positive social or environmental
impact; alternatives, particularly venture and real assets, are some of the most direct
ways for investors to do well and do good. A growing number of alternatives are
impact investments, those intentionally designed for both returns and impact.
For example, venture capital is the asset class of innovation. Venture investments
fund new ideas and technologies that create disruption, meaningful change, and
solutions that help address some of the world's most pressing social, economic, and
environmental issues. Because venture spans all sectors, investors can be specific
with respect to investing in the issues most meaningful for them. Examples include
venture investing to increase healthcare quality and access, reduce friction and cost
of education, accelerate the energy transition, and alleviate housing poverty through
innovations that decrease the cost and time for housing construction. Investors can
also choose to invest in startup companies founded by women, people of color, and
other underrepresented groups to support greater diversity.
Other strategies are inherently impactful, such as affordable housing or infrastructure
projects that generate green power. Both investment areas are also supported by
policy and regulations that can potentially enhance financial returns through tax
credits and incentives. From an investor's perspective, impact investments offer a
direct line of sight from their investment dollar to engaging and meaningful impact
outcomes alongside returns.
Building a Portfolio Around Goals
Most investors have more than one goal when it comes to investing. Alternatives, more
so than stocks and bonds alone, have the potential to accomplish multiple objectives
through just a few asset classes.
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UniFi by CAIA Crossing the Threshold

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