StanChart turns to hedge fund strategies to shield wealth clients from volatility

By Rae Wee

SINGAPORE, Aug 20 (Reuters) - Standard Chartered is helping its wealth management clients deploy a portion of their assets to hedge funds to better cushion the impact of heightened market volatility, a top executive said.

The Asia-focused bank's move comes as global allocations to hedge funds have gathered pace with investors increasingly looking beyond traditional stocks and bonds into alternative assets, and as StanChart leverages the region's rapidly growing affluent population to grow its wealth business. 

"I think this is a good product to offer to clients as something that gives them a little bit of a hedge and stable returns," said Samir Subberwal, StanChart's global head of wealth solutions, retail products, data and analytics.

"Hedge fund strategies, such as equity market neutral and multi-strategy fund of hedge funds, have a clear focus on generating positive, lowly correlated absolute returns and can help investors navigate choppy markets," Subberwal told Reuters.

"The performance of these hedge funds have actually been quite resilient over the last few years."

Global hedge funds returned an average of 7% in the first six months of 2026, well above the 10-year average of 4.1%, according to a Goldman Sachs note last month. Data from hedge fund ​industry research firm HFR showed hedge fund assets grew by the largest amount in history last quarter, as total assets under management rose by $409 billion to $5.6 trillion.

Hedge fund allocations will be a key focus for StanChart, Subberwal said: "It is about completing the suite of products so we can help clients diversify their portfolios and be able to manage the volatility of markets much better."

StanChart reported a forecast-beating first-half profit last month, driven by a surge in wealth and global banking revenue as wealth income soared 38%.

The gain was powered by a double-digit rise in investment products as inflows and the number of new accounts increased as market volatility drove up demand for wealth advice.

Subberwal said managed investments, including public funds and variable capital companies, structured products and cash equities were among the products that experienced the strongest growth. 

(Reporting by Rae Wee; Editing by Saad Sayeed)