Typically, if you want to invest, you have to purchase a whole asset or an entire investment proposal. But with fractional investing, you can buy a portion or share of an asset. You can invest the amount of money you want to, regardless of the share price. This makes investing more affordable and accessible for people who don’t have loads of money to invest.
Put simply, a fractional share is a portion of a whole share, sold at a fraction of the share price. For example, if a company’s market share price is £100 a share, and you were buying £10 worth of it, you would own 0.1 (10%) of a share. Fractionalised shares provide a simple, low-cost way to invest.
Alternative assets, like property, sustainability projects and collectables can be attractive to invest in, but they often come with a hefty price tag. Fractional shares of alternative assets work basically in the same way as fractional shares. Instead of buying a £100,000 painting outright, an investment platform could sell 10,000 shares at £10 each. If the platform then sells the painting for a profit, the profit would be divided amongst the investors based on how many shares they owned, minus any expenses.
Some popular stocks trade at over £1000 per share. Whereas you could for example invest with as little as £10 in fractional shares. This helps to make investing more affordable and accessible.
Fractional investing also opens up opportunities for people who are passionate about collectables, art, vintage cars, whisky, etc. to invest in alternative assets that may not otherwise be accessible at full price. Fractional investing makes this possible.
When the price of investing in a variety of different companies and assets is reduced, it becomes easier to create a diversified portfolio. With fractional shares of stock, an investor can allocate a certain percentage of their portfolio to each stock or asset, regardless of their share price.
Fractional investing in alternative assets is a great way to diversify your portfolio because alternative assets often have a low or no correlation with the stock market.
Fractional investing gives many a fair chance to create a well-diversified portfolio.
When it comes to investing in alternative assets, platforms like Ctrl Alt make the process simple and secure. Here’s how it works:
1. We find the assets: We work with experts to discover the best alternative asset investment opportunities.
2. We fractionalise: We split the asset into legally backed digital shares. This ensures investors have a legal claim to the asset.
3. You invest: You input the number of fractional shares you want to buy.
4. We transfer the shares: The digital shares are then transferred to your digital wallet for you to view at any time. It’s that simple.
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1. The Pros and Cons of Alternative Investments
Your capital is at risk. Alt Ltd does not provide investment advice. Individual investors should make their own decisions or seek professional independent advice if they are unsure as to the suitability/appropriateness of any investment for their individual circumstances or needs, including potential tax treatment. The value of investments can go up as well as down and you may receive less than your original investment or lose the value of your entire initial investment. Past performance is not a reliable indicator of future results. Currency rate fluctuations can adversely impact the overall returns on your original investment. Learn more by reading our full Risk Disclosure and our FAQs.