Alternative Investment Funds: What Are They, and Who Regulates AIF?

Alternative Investment Funds: What Are They, and Who Regulates AIF?

Investing is something that most people do today to gain additional income and secure their future throughout retirement. With both classic investment options like stocks and some modern variations like cryptocurrencies and NFTs, there is also another option that continues gaining popularity. If you are looking for a place to invest money online, you might want to try using an alternative investment fund.

About Alternative Investment Funds

Alternative investment funds or AIFs are financial services that collect privately pooled investments and invest them in a variety of projects, businesses, real estate, and more. Most alternative investment funds require big investments, which is why most businesses or advanced investors with substantial capital can invest. However, there are options available for most investors.

For example, Quanloop is one of the popular European AIFs that require only one euro to start investing. While this investment platform is convenient for people with a starting capital from 500 euros to 15 thousand euros, you will need only 1 euro to start and try this service. The money is pooled from all investors on the platform throughout the day, after which Quanloop invests it in factoring firms and leasing businesses. The key feature of this platform is that it only borrows funds for 24 hours and returns them to the users’ accounts each day at midnight. With such high liquidity, low minimum investment amount, as well as a variety of investment plans to increase security, this option is becoming more popular among European investors, both beginner and proficient.

To ensure financial security and legality, alternative investment funds are regulated by European authorities and respective institutions in each country. For example, some of the regulators include FSA (Financial Supervisory Authority of Estonia), CBN (Czech National Bank), Bank of Lithuania, CBI (Central Bank of Ireland), and more.

The Advantages of Investing in AIFs

When talking about AIFs in general, a few key advantages come to mind:

  • Diversifying investment portfolio – using such funds for money online investment, it is possible to diversify your portfolio. Each platform allows investing in a wide range of assets, although some investment services do not allow choosing the exact businesses to direct your investments to. In any case, the assets available for investing are not affiliated with the stock market, and managers have more flexibility in creating a portfolio.

  • Hedging against volatility – as previously mentioned, the investments directed to AIFs are either not related to the shares market or have less relation to it. This means that the returns received do not change so dramatically because of market fluctuations. This is why AIFs are also useful for stabilizing investment portfolios.

  • Decent returns – when investing for earning passive income, alternative investment services become very convenient. They can offer better returns on your money than some of the classic passive income solutions, such as bonds. Because they are more immune to market fluctuations, their returns also turn out higher.

These are some of the main benefits of AIFs. When European investors are looking for solutions where to invest money online, such alternative solutions are widely available.

Who Can Invest Money in AIFs?

With most alternative investment platforms operating in Europe, businesses and European citizens can invest in them. For investors living in other countries, there are alternative solutions, such as using European bank accounts, etc. A variety of third-party financial services allow making the necessary payments as well, which enhances the accessibility of AIFs.

With Quanloop requiring only a single euro to start investing and other services with minimum investments as low as 10 euros, such solutions become very affordable as well. In addition, individual investors are required to be at least 18 years old to be eligible to create an account on an AIF platform. Some investment platforms have their preferences regarding payments, such as SEPA transfers, so keep this in mind as well.

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