Global Market: Standard Chartered expands hedge fund offerings as investors seek protection from market volatility

Standard Chartered is helping its wealth management clients allocate part of their portfolios to hedge funds as investors look for ways to reduce the impact of heightened market volatility and diversify beyond traditional stocks and bonds, Reuters reported.

The Asia-focused bank is placing greater emphasis on hedge fund strategies as alternative investments gain traction globally. The move also comes as Standard Chartered seeks to capitalise on the rapid growth of affluent populations across Asia and expand its wealth management business.

Reuters reported that hedge fund allocations are becoming an increasingly important part of Standard Chartered's wealth strategy. The bank is focusing on strategies such as equity market neutral and multi-strategy funds that aim to generate returns with relatively low correlation to broader markets.


Global hedge funds returned an average of 7% during the first half of 2026, significantly above their 10-year average annual return of 4.1%, according to a Goldman Sachs note cited in the report. Meanwhile, data from industry research firm HFR showed that hedge fund assets under management increased by a record $409 billion in the latest quarter to $5.6 trillion.

Wealth Management emerges as key growth driver

Standard Chartered's increased focus on alternative investments comes after the bank reported better-than-expected first-half profit, supported by strong growth in its wealth and global banking businesses.

Wealth income surged 38% during the period, with investment products recording double-digit growth as increased market volatility encouraged more clients to seek professional wealth advice.

Products that saw particularly strong demand included managed investments such as public funds and variable capital companies, structured products and cash equities. Rising inflows and an increase in new client accounts also contributed to the growth.

The bank's broader strategy is to expand the range of investment products available to clients while helping them build more diversified portfolios. Hedge funds are expected to play a greater role in that offering as investors seek alternatives that can potentially provide more resilient returns during periods of turbulent markets.

Standard Chartered's push into hedge fund allocations highlights the broader shift among wealthy investors toward alternative assets, as traditional portfolios face greater uncertainty from changing interest rates, geopolitical risks and volatile equity markets.

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