The term “alternative assets” refers to assets that, traditionally, have not been a significant part of typical portfolios. Alternative assets include private equity, venture capital, and hedge funds. The inclusion of alternative assets in the asset allocation mix can enhance performance and reduce portfolio volatility through better diversification which cannot be achieved by investing in traditional asset classes. Investors should keep in mind however, that investing in alternative assets entails unique risks and thus it may be suitable only for a subset of investors that meet strict requirements in terms of investment horizon and risk tolerance.