Fund Managers Have Shifted Portfolios Toward Alternatives
New data suggests global firms are moving capital away from U.S. markets to focus on private assets and hedging strategies.
Updated on Sept. 23, 2026 in Investing
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Ninety percent of fund managers plan to increase their exposure to alternative assets like infrastructure and hedge funds over the next three years. This shift reflects a broader trend of managers rotating capital away from U.S. markets toward Europe.
Why it matters
Macroeconomic and geopolitical volatility have made it difficult for firms to maintain long-term investment horizons, forcing a change in how they construct portfolios. This recalibration is significantly driven by a need for integrated data analytics and advanced portfolio management tools.
A recent survey of 250 senior executives found that 90% intend to expand into alternatives, while 69% expect to pivot away from U.S. markets over the next two years. These changes occur as 89% of firms have already altered their portfolio construction in the past 12 months.
The players
Clearwater Analytics
A financial software provider that delivers data and reporting solutions used by large institutional asset managers.
The details
Fund managers are moving away from traditional models in favor of core-satellite allocation strategies, which split portfolios into core holdings and high-potential satellite investments. To execute these strategies, firms are increasing their use of internal hedging to manage short-term pressures. Over three-quarters of firms now cite advanced portfolio systems as a key influence on how they build these complex investment structures.
Timeline
Past 12 months: Fund managers increased hedging and altered portfolio construction.
Next 2 years: Market focus is expected to rotate away from the U.S. toward Europe.
Next 3 years: Firms plan to increase inclusion of alternative assets in core strategies.
Money Landscape
This pivot reflects a structural move toward core-satellite allocation strategies designed to navigate ongoing geopolitical volatility. It highlights a departure from historical U.S.-centric portfolio construction toward a more globally diversified, alternative-asset approach.
Investors may notice their own portfolios or retirement funds shifting to include more alternative assets like private equity or infrastructure. Consult with a financial professional to understand how changes in institutional asset allocation might influence your fund's risk profile.
The takeaway
Firms are increasingly prioritizing short-term hedging and alternative assets to combat global market volatility. Monitor your own investment statements for changes in fund composition as managers execute these multi-year reallocation strategies.
Further reading
For more on how shifts in institutional strategy impact global markets, visit our Investing section.
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