How The Ultra-Wealthy Have Invested This Year And What You Can Do Now

Inside The Ultra-Wealthy Portfolio: How Capital Was Allocated This Year

“Ultra-wealthy” generally refers to households with $30 million or more in net worth, the threshold most industry researchers use to define the category. UBS surveyed 307 family offices this year, averaging roughly $1.3 billion in assets under management and $2.7 billion in net worth, for its 2026 Global Family Office Report. Across that group, alternative investments made up about 42% of the average portfolio. That’s a notable jump from single-digit allocations a decade ago, and it reflects a broader pattern: the ultra-wealthy are increasingly prioritizing capital preservation and uncorrelated income over simply tracking a public index.

Several forces drove the reallocation, according to the UBS report. Public equity valuations looked stretched after years of gains concentrated in a handful of mega-cap names, and a weaker dollar outlook made some offices reconsider currency exposure. Markets also absorbed real shocks: in April, escalating tariff announcements, including a new round targeting Canadian goods, triggered the most volatile trading conditions since the pandemic crash, with the S&P 500 swinging more than 4% in a single session twice in three weeks and the VIX spiking above 38. Layered on top is an estimated $83 trillion in wealth UBS expects to pass to the next generation over coming decades, prompting many offices to revisit long-held strategies before handing them off.

The net effect: a rotation away from some traditional holdings and toward others. Private equity, long the single largest alternative allocation for this group, now sits around 17% of the average portfolio, down from the roughly one-fifth it represented a few years ago, while private credit, secondaries, infrastructure and gold absorbed some of the difference, per UBS’s data.

Core Pillars Of The Billionaire Playbook This Year

Beneath that headline shift, four specific strategies defined how ultra-wealthy portfolios were positioned this year. Each addresses a different concern, income without relying on traditional bonds, private-market access without a decade-long lockup, tax precision and inflation protection, together forming a playbook increasingly visible across family office and billionaire portfolios alike.

Private Credit And Floating-Yield Debt

Private credit, loans made directly to companies outside the traditional banking system, usually at floating rates, has become a staple allocation for family offices, typically around 3% of the average portfolio. What’s notable is how steady that allocation stayed even after a wave of unsettling headlines in late 2025, including the First Brands bankruptcy, which rattled some investors and fueled talk of a bubble in the asset class. Family offices largely didn’t blink.

Much of the growth has flowed through business development companies, or BDCs, perpetual vehicles that hold portfolios of private loans. Non-traded BDC industry assets grew from $45 billion at the end of 2021 to $229.6 billion by the third quarter of 2025, with interval funds like the Cliffwater Corporate Lending Fund now managing nearly $30 billion on its own. Private credit’s floating-rate structure has made it appealing while the path of interest rates stayed genuinely uncertain.

Private Equity And Evergreen Funds

Traditional private equity, the kind locked up in a fund for seven to ten years, has gone through a real retreat. Family office allocations to combined direct and fund investments now sit around 17% of the average portfolio, down from closer to a fifth a few years ago, per UBS’s 2026 Global Family Office Report, as a persistent lack of cash distributions collided with strong public market performance, making the illiquidity harder to justify. That doesn’t mean family offices are abandoning private equity, just accessing it differently.

Much of that capital has rotated into evergreen funds, open-ended, semi-liquid structures with no fixed termination date that allow periodic redemptions rather than a single multi-year lockup. U.S. evergreen fund assets reached roughly $607 billion across 567 funds in the first quarter of 2026, up from $590.8 billion a year earlier, according to Morningstar PitchBook data, and some individual vehicles, like Partners Group’s evergreen private equity fund, have operated continuously since 2009. The appeal is straightforward: exposure to private deals with a liquidity option traditional drawdown funds never offered.

Direct Indexing And Tax Loss Harvesting

Direct indexing means owning the individual stocks inside an index directly, rather than a single fund, which lets an investor harvest tax losses stock-by-stock while still tracking the index’s overall performance. It’s long been a favorite of family offices specifically for that tax precision, and 2026 has been a landmark growth year more broadly: Cerulli Associates projects direct indexing assets will surpass $800 billion by year-end, a roughly 12% annual growth rate that outpaces ETFs, mutual funds, and traditional separately managed accounts.

The tax benefit is measurable. Range, a wealth management platform, reported that in 2025, its client accounts using direct indexing harvested an average of $18,281 in losses, versus just $4,808 for otherwise similar ETF-only accounts, nearly a fourfold difference. For an investor facing a combined tax rate well above 50% on short-term gains, that harvested loss is worth considerably more than its face value, though as with any single firm’s client data, actual results vary by account size, market conditions, and timing.

Real Assets And Cash-Flow Hedges

Gold had a defining year. As tariff tensions escalated in April, prices touched roughly $4,800 an ounce, and gold’s 60-day correlation to the S&P 500 turned sharply negative, around negative 0.72, during the worst selling sessions, reaffirming its role as one of the few reliable hedges when stocks and bonds sell off together. Family offices responded by nudging gold allocations from 2% toward 3%, according to UBS’s 2026 Global Family Office Report.

Infrastructure told a similar story for different reasons. Allocations that sat near zero for years have climbed from 1% to roughly 2%, per the same report, driven largely by a push into power, resources and AI-enabled healthcare, the physical backbone behind growing AI compute demand. Real estate moved the opposite direction, trimmed from 11% to 8%, suggesting family offices are being more selective about which real assets they hold rather than abandoning the category.

Ways Everyday Investors Can Mimic The Ultra-Wealthy Now

None of the strategies above require a billion-dollar balance sheet. Several have been repackaged into forms retail investors can access through a standard brokerage account, often at a fraction of the historical cost.

Add Alternative Yield Via Interval Funds And Option ETFs

Option-income ETFs offer one of the more accessible ways to replicate a private-credit-like income stream. Funds such as the JPMorgan Equity Premium Income ETF sell call options against a portfolio of stocks, collecting premium income in exchange for capping some upside, and the category broadly yields between 7% and 12% annually. It’s a different kind of passive income strategy than a dividend stock or bond fund, and the higher expense ratios and capped upside are worth understanding before allocating meaningfully to it.

Interval funds offer a second path, with more friction. These registered funds hold private credit or real estate exposure while offering quarterly redemption windows, typically capped around 5% of net asset value. Some, including large private credit interval funds, are open only to accredited investors, so eligibility is worth confirming first.

Implement Direct Indexing Or Custom Fractional Portfolios

Direct indexing has moved sharply down-market. Minimums that once required $1 million or more at a private bank have fallen to as little as $5,000 at several retail platforms, and fees that used to run around 0.50% now start closer to 0.09%. For an investor sitting on concentrated stock gains, a custom, fractional-share portfolio built to track an index while harvesting losses can offer real after-tax value, typically most in the first few years, with the benefit shrinking over time.

Optimize Tax Location And Rebalancing

Where an investment sits, a taxable account, a traditional IRA or a Roth, can matter nearly as much as what’s inside it, since interest-heavy holdings generally belong in tax-advantaged accounts while more tax-efficient holdings can sit in taxable ones. Pairing that with disciplined portfolio rebalancing, resetting a portfolio to its target allocation on a schedule rather than reacting to swings, applies the same discipline family offices rely on without needing any specialized account structure.

Risks And Limitations Of Copying Ultra-Wealthy Strategies

Liquidity is the first consideration. Evergreen and interval funds offer far more flexibility than a traditional ten-year private equity lockup, but periodic redemption windows, often capped at 5% of assets per quarter, are not the same as being able to sell on any given day. An investor who may need the money on short notice should weigh that constraint before committing capital.

Cost and complexity come second. Option-income ETFs typically carry higher expense ratios than a plain index fund, and many private structures involve additional tax reporting, sometimes including K-1 forms, that a simple brokerage account never requires. Some interval funds also restrict access to accredited investors only.

Direct indexing carries its own limitation worth understanding upfront: the tax benefit has a shelf life. Every loss harvested lowers that lot’s cost basis, shrinking the pool of future losses available. By year five in a generally rising market, most accounts have already captured the large majority of the lifetime tax benefit they’ll ever produce, though the strategy still offers value through diversification and customization beyond that point.