A recent HSBC survey shows that affluent investors are increasingly turning to alternative assets, with gold emerging as a prominent choice. More than half of those surveyed said they intend to increase their exposure to alternatives such as private market funds and hedge funds over the next 12 months, effectively planning to double their current allocations.
Gold recorded the largest increase among asset classes. Average portfolio allocations to gold rose from 5% to 11%, and almost half of respondents indicated they plan to add more gold during the coming year. Physical gold remains a popular safe-haven holding, prized for its stability in volatile markets, while younger investors—particularly Millennials and Gen Z—are showing growing interest in digital forms of gold.
At the same time, cash holdings have declined notably, especially among younger cohorts. Many investors are shifting away from large cash positions in favor of assets that aim to deliver long-term resilience and growth. This shift reflects a broader move toward diversification and active management within affluent portfolios, as investors seek alternatives that can complement traditional stocks and bonds.
The survey’s findings underscore a renewed focus on portfolio protection and diversification. With geopolitical and economic uncertainty influencing sentiment, gold’s appeal as both a physical asset and a digital investment is strengthening. Meanwhile, private market opportunities and hedge funds are drawing attention for their potential to provide differentiated returns and lower correlation with public markets.
Financial advisers and wealth managers are likely to see increased demand for strategies that incorporate alternative assets, balanced against each client’s risk tolerance and investment horizon. For many affluent investors, a mix of physical gold, select alternative funds, and reduced cash exposure is shaping up as a preferred approach to navigating uncertain markets while pursuing long-term growth.