Report published September 28, 2026

How to Diversify with Alternatives? Portfolio Positioning Insights from UBS

UBS · September 28, 2026

UBS recommends incorporating alternative investments to enhance returns, reduce volatility, and build portfolio resilience against market declines. Investors should emphasize selectivity, favoring discretionary macro hedge funds, private equity secondaries, and cash-flow-resilient infrastructure assets.

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Finvaulta summarizes UBS's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.

Key Takeaways

1.Alternative investments serve as a differentiated return source and portfolio diversifier, though current geopolitical uncertainty and credit market stress require disciplined liquidity and selectivity.
2.Hedge funds act as a portfolio stabilizer, with discretionary macro, lower net, equity market neutral, and multi-strategy funds favored to navigate policy divergence and capture alpha.
3.Private equity has reached an inflection point favoring value-oriented strategies, secondaries, and geographic diversification (Europe and Japan), while private debt requires increased selectivity due to a diminished near-term risk-return profile.

Key message
01 Hedge funds can be a fresh return source and portfolio stabilizer.
02 Private markets still offer opportunities for diversification, return generation, and income.
03 We see numerous paths to invest in alternatives, subject to careful risk management.
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Key figures extracted from this report

Metric	Estimate	Context
Allocators planning to increase hedge fund allocations	50.0%	Midyear prime broker survey on institutional hedge fund allocator intentions
Net demand for hedge fund allocations	47.0%	Net demand reached a record high among allocators surveyed by Goldman
US renewable energy curtailments	17.5%	Curtailments rose across six independent system operators due to transmission constraints
Net inflows into open-ended infrastructure funds	30.0%	Investor appetite for open-ended infrastructure funds
Infrastructure asset class return	1.2%	Infrastructure asset class performance moderation at the start of 2026