Want to Invest Like a Billionaire? This Broker Just Made It Easier

SoFi's investment platform started out as little more than an easy-to-use app that allowed members to buy and sell stocks. However, it has since evolved into much more. It added options trading with no commissions, introduced an excellent robo-advisor (SoFi Automated Investing), started offering IRAs with a matching bonus for contributions, and rolled out access to initial public offerings (IPOs) for all investors on its platform.

Despite all of that, SoFi apparently isn't done just yet. The banking disruptor recently announced that it is adding mutual fund investing to its platform, which was the last major investment type that hadn't been available. Plus, it's going a step further and opening access to several alternative investment funds -- a type of investment typically available to wealthy investors, and a big differentiator from most other brokers.

Alternative investment funds available through SoFi

Initially, SoFi's investment platform is adding access to more than 6,000 different mutual funds to its members, as well as five alternative investment funds. Here's what they are and a little about each one:

• ARK Venture Fund: Offered by Cathie Wood's Ark Invest, which is the company behind several popular growth-oriented ETFs. The fund invests in several pre-IPO businesses, including SpaceX and Epic Games, just to name a couple.
• Carlyle Tactical Credit Fund: Invests primarily in private fixed-income securities and credit instruments, targeting a high income distribution rate.
• KKR Credit Opportunities Portfolio: Similar to the Carlyle fund, this one also provides access to credit investments designed to produce a higher yield than traditional fixed-income investments.
• Clarion Partners Real Estate Income Fund: Offered by Franklin Templeton, this fund invests in a portfolio of real estate assets with the objective of producing superior total returns over time.
• Franklin BSP Private Credit Fund: Similar in nature to the other two credit funds, this aims to capture opportunities in the credit market to produce a relatively high level of income.

The key takeaway is that these are investment vehicles that have historically only been available to wealthy investors, not everyday people. SoFi is aiming to change that, and this is just the latest step -- after all, SoFi was the first major broker to add access to IPOs for all investors on its platform (which it still offers).

What does it cost?

Initially, investing in these alternative funds will be completely commission free. After the first 60 days (which started on Jan. 29), SoFi will charge a 0.50% purchase fee, which is relatively low for an alternative investment like this.

It's also worth noting that the alternative funds offered through SoFi may have their own underlying investment expenses, as well as investment minimums that are set by each fund manager.

Should you buy alternative investment funds?

Like most investment options, adding alternative investment funds to your portfolio isn't a good idea for everyone. Investing in things like pre-IPO businesses comes with its own unique set of risks, and it's important to do your research to know what you're getting into.

Having said that, the addition of these alternative investment funds, as well as the availability of more than 6,000 mutual funds, adds significant value to SoFi's investment platform, which was already one of our top rated brokers. This marks a big step towards becoming a true all-in-one investment platform that can go toe to toe with any of its larger and long-established competitors.