(HedgeCo.Net) The classic stock?bond mix (often 60/40 or 70/30) is under scrutiny. Rising market volatility, inflation concerns, and changes in interest?rate expectations are pushing investors to rethink what “core” in a portfolio really means. Increasingly, alternative investments (private equity, real estate, commodities, hedge?fund?style products) are being elevated from peripheral allocations to core positions. Business Insider+2Wealth Management+2
Recent signals:
- José Minaya, Global Head of Investments & Wealth at BNY Mellon, recommended a 50/30/20 split: 50% equities, 30% bonds, 20% alternatives. He argues this gives portfolios better resilience in uncertain markets and offers ways to smooth returns, especially via less correlated asset classes. Business Insider
- Advisor surveys show usage of alternative vehicles has surged: among financial planners, use of publicly traded REITs, non?traded REITs, private debt, precious metals has all gone up substantially from 2024 to 2025. Wealth Management+1
Drivers:
- Inflation & yield concerns: As inflation eats away at returns, investors seek assets that can hedge or benefit from inflation—real estate, commodities, inflation?linked structures.
- Volatility in public markets: With interest rate shifts, geopolitical risk, tech sector fluctuation, etc., traditional equities + bonds are sometimes not delivering the smoothing investors expect. Alternatives offer additional sources of return and hedging.
- Technology & access: New platforms, better data, tokenization, digital wrappers, and regulatory innovations are making it easier for retail investors and smaller institutions to access classes previously reserved for large players.
Challenges:
- Many alternatives remain illiquid, opaque, expensive.
- Risk of over?crowding: If too much capital rushes in, valuations may be less attractive.
- Regulatory oversight and transparency: Growing concern over how these portfolios are valued, how fees are charged, how risks are disclosed to investors