Wealthy investors have significantly increased their exposure to alternative investments over the past year, according to a global survey of 10,797 investors conducted by HSBC. More than half of respondents now plan to include alternatives in their portfolios within the next 12 months, reflecting a clear shift in asset allocation preferences among high-net-worth individuals.
Gold stood out as the fastest-growing asset class in this shift. Allocations to gold rose from 5% to 11% of portfolios, more than doubling and representing the largest increase across all asset categories measured. Physical gold remains a leading safe-haven choice, with 41% of surveyed investors indicating plans to own it. Interest in digital forms of gold is also notable: 28% of investors said they were looking at digital gold solutions, signaling growing acceptance of tokenized or digitalized precious metals alongside traditional bullion holdings.
The move toward alternatives is most pronounced among younger generations. Gen Z and Millennial investors, in particular, have increased alternative exposure while reducing cash holdings sharply—from 31% down to 17%—suggesting a more active approach to portfolio construction and a willingness to pursue non-traditional assets for returns or diversification. This generational trend highlights differences in risk tolerance, investment horizons, and openness to new asset formats such as digital gold.
Several factors likely contribute to this reallocation. Persistently low yields on traditional fixed-income instruments, elevated inflation concerns, and ongoing geopolitical uncertainty have pushed investors to seek assets that can preserve value or offer diversification benefits. Alternatives, including precious metals, private equity, real assets, and digital asset representations of commodities, are being viewed as viable complements to stocks and bonds in multi-asset portfolios.
Within the alternatives category, gold’s appeal is rooted in its historical role as an inflation hedge and store of value. For many investors, physical gold provides tangible security and a sense of protection against currency depreciation or market volatility. Digital gold options, while newer, attract those who value ease of transaction, fractional ownership, and integration with modern digital platforms—particularly younger, tech-savvy investors.
The HSBC survey’s findings imply that wealth managers and financial advisers may need to adapt their product offerings and client conversations. As demand for alternative allocations grows, advisers should be prepared to discuss the trade-offs, costs, liquidity profiles, and custody considerations associated with both physical and digital forms of alternative assets. Clear guidance on portfolio construction, risk management, and how alternatives fit within long-term objectives will be valuable to clients shifting away from cash and traditional fixed income.
In summary, the past year has seen a marked reallocation toward alternative investments among wealthy investors worldwide, with gold leading the surge. Younger generations are driving much of the change, demonstrating reduced cash buffers and greater interest in both physical and digital alternatives. These trends are reshaping how high-net-worth portfolios are constructed and signal an ongoing appetite for diversification beyond conventional equities and bonds.