Anastasia Amoroso, Managing Director and Chief Investment Strategist at iCapital, joined Julie Cooling, Founder and CEO of RIA Channel, to discuss the role of alternative investments and structured products in client portfolios.
iCapital’s 2025 market outlook, titled Solid Economic Underpinnings But Wildcards Create Uncertainty, predicted wildcards. This has come to pass with tariffs, taxes, and increased budget deficits. Amoroso recommends that investors stay invested but expand the opportunity set by adding alternative investments to their investments in publicly traded stocks and bonds. Private markets can enhance income and dampen volatility.
iCapital is experiencing significant demand for structured investments and annuities. Today, advisors are using structured notes for more income-oriented strategies than for growth. Amoroso notes that investors are more interested in locking in gains with stocks near record highs than adding to their equity exposure. Structured products can monetize increasing market volatility through the sale of call or put options.
Approximately three-quarters of the flows on the iCapital platform are moving into private credit and private equity, which are relatively equally weighted between the two strategies. The strategy gaining the most traction is infrastructure, which has increased from 7% to 35% of real asset investments in recent years. Infrastructure investments can help hedge inflation and meet the growing capital needs for energy transition and data center installations.
Resources: