By Jermaine Koh
If you’ve only got a minute:
- 2026 is likely to stay uneven, with lingering uncertainty even as markets continue to grow.
- Alternatives play a supporting role in managing volatility.
- Retail investors can still diversify using accessible instruments where private assets aren’t an option.
2025 was, by most measures, a better year for markets. Inflation eased, interest rates started to drift lower and risk assets recovered in parts. Yet it never quite felt steady. Volatility came and went, headlines changed quickly, and confidence remained fragile.
This tension sits at the heart of DBS CIO’s 4Q2025 message. The key signal was not about chasing the next big theme, but about staying invested and diversified. In that context, alternatives such as gold, private assets and hedge fund strategies were highlighted as tools to help portfolios stay resilient, especially when markets feel unsettled rather than outright weak.
Looking ahead to 2026, the role of alternatives is less about excitement and more about stability.
Gold, a quiet anchor
Gold has long played a familiar role in portfolios during uncertain times. After a strong 2024 – when gold rallied roughly more than 25% in USD terms over the year – the metal embarked on an even more striking ascent in 2025. By late in the year, gold had surged over 60% year-to-date, setting new record price levels above USD4,000 per ounce and standing out as one of the better-performing major asset classes globally. Importantly, DBS CIO continues to view it as a strategic diversifier, particularly when macro risks refuse to stay neatly contained.
In periods of geopolitical tension, currency volatility or shifting real interest rates, gold has historically behaved differently from equities and bonds. When risk assets stumble, gold has tended to hold its ground or move independently, helping smooth overall portfolio outcomes. It is not meant to outperform risk assets in strong markets. Instead, it aims to hold value when confidence wavers.
CIO highlights gold as part of a broader resilience layer, helping to offset portfolio volatility during periods of stress. For investors, access typically comes through physical gold, gold-backed ETFs or gold-related funds.
Retail investors can gain exposure to gold price movements without the logistics of storing physical bullion by investing in:
Gold ETFs
These are funds that hold physical gold in secure vaults, and their shares trade on stock exchanges like the SGX.
How to invest: You can purchase SGX-listed gold exchanged-traded funds (ETFs), such as the popular SPDR Gold Shares ETF (GLD) or iShares Gold Trust, through a DBS Vickers Online Account. The SPDR Gold Shares ETF is the only gold ETF on the SGX that can be invested using CPF funds.
Gold-Focused Unit Trusts
These funds typically invest in gold mining companies. The Ninety-One GSF Global Gold Fund is an example offered as part of the curated DBS CIO Insights Funds.
How to invest: Unit trusts can be purchased via the DBS Online Funds Investment platform on DBS digibank via digiWealth.
Robo-advisorsFor a professionally managed and diversified approach, DBS's robo-advisory service offers portfolios that may include exposure to gold or gold miners.
How to invest: The DBS digiPortfolio Global Portfolio provides exposure to gold miners across all risk profiles through ETFs.
Private assets, stability through different rhythms
Private assets – think private credit, private equity and infrastructure – stay squarely within CIO’s alternatives shelf for good reason. They operate on a different rhythm than public markets: valuations are not marked daily and cash flows and returns unfold over a longer arc.
This lower correlation with stocks and bonds can bring an element of stability, especially when headline risks flares. Private credit, for example, often offers predictable income streams. Infrastructure investments can benefit from long-term contracted revenues. Over time, these characteristics can help absorb volatility that would otherwise affect a portfolio heavily weighted to public equities or government bonds.
That said, understand that there will be trade-offs. Private assets are intrinsically long-term. Lock-in periods tend to be lengthy, liquidity is limited, and fee structures are typically higher than for public market funds. They are best suited for those with longer time horizons and sufficient liquidity elsewhere in their portfolios.
Retail clients usually have limited or no access in private markets, but the idea still holds. Diversification across different return drivers can matter. Public market proxies like diversified credit funds or infrastructure-focused ETFs can offer conceptually similar diversification benefits.
DBS offers several publicly accessible investments that can provide similar diversification benefits and exposure to various asset classes:
Pooled Investment Products
- Unit Trusts and ETFs: DBS offers a wide selection of unit trusts and ETFs that invest across different geographies and sectors, including infrastructure, commodities, and a mix of equities and bonds.
- DBS digiPortfolio: This robo-advisor service builds diversified, ETF-based portfolios automatically based on an investor's risk profile and goals. It offers portfolios with global or Asia exposure, including an Income Portfolio that provides regular payouts from dividends bonds.
Hedge funds and multi-strategy funds, flexible volatility tools
Hedge funds and multi-strategy funds are built to handle different market conditions. By spreading risk across several strategies, they aim to smooth out ups and downs rather than deliver eye-catching returns.
In the 4Q2025 outlook, DBS CIO maintains an overweight allocation to hedge funds and multi-strategy funds. By blending different strategies, hedge funds aim to perform in both up and down markets, though performance and risk profiles vary across managers.
In portfolios, they are treated as buffer to dampen volatility while equities and bonds carry the long-term.
For retail investors, direct access is usually off-limits, but the concept can still be applied through:
- Multi-asset or absolute return funds that combine equities, bonds and alternative instruments.
- Long-short ETFs or structured products that provide partial downside protection.
The core lesson is even without a hedge fund; retail investors can introduce strategies that help portfolios navigate uncertainty and smooth returns in turbulent markets.
What this means for a changing 2026
Several uncertainties remain in 2026.
- Interest rate uncertainty: Policy paths remain fluid, keeping markets on edge.
- Macro risks: Geopolitical tensions and uneven growth continue to influence market swings.
- Public market valuations: Some markets are richly priced, raising the chance for sharp corrections. For example, stocks have gotten expensive, meaning people are paying a lot for each unit of profit today compared with history. When prices are this high, the room for error shrinks. If something goes slightly wrong, prices can fall faster because they were already “priced for perfection”.
- Liquidity and access: Private markets can provide stability but require patience; public markets are more accessible but can swing quickly.
In this environment, diversification with resilience is key. So, layer your portfolio for resilience, rather than betting on any single theme or asset class.
Final thoughts
Blending gold, private assets and hedge strategies is about preparation, not prediction. Gold provides ballast, private assets offer alternative cash flow patterns, and hedge strategies help smooth volatility.
Even for retail investors, the underlying principles – diversification, managing risk and seeking stability – can be applied through accessible tools. This kind of layered approach may help portfolios weather uncertainty with fewer surprises.
