Ultra High Net Worth Asset Allocation

It’s easy to see your seemingly rich friend and forget about the fact that there are people in this country whose wealth makes the average doctor or lawyer seem like a pauper by comparison. Ultra-high net worth investors typically have different objectives when it comes to investing than the typical investor. They have significantly more money at stake and, therefore, need to go beyond basic portfolio diversification strategies to minimize their risk and avoid concentrating too much money in any one particular investment. With that in mind, what is the right ultra-high net worth asset allocation for you?

No matter your net worth, consider finding a financial advisor to help make it grow.

What Is Considered Ultra-High Net Worth?

There are several different classes of investors that are categorized by the amount of money they have available to invest. These numbers focus on investable assets, therefore, they exclude your home’s equity.

Average investors generally have less than $100,000 and much of this is in their retirement accounts at work. High net worth investors typically have liquid financial assets of at least $1 million. Very high net worth clients have at least $5 million in liquid assets. To be classified as ultra-high net worth, you need at least $30 million available to invest.

Ultra-High Net Worth Asset Allocation

With portfolios starting at $30 million, ultra-high net worth investors need a financial plan to manage their assets. Most want to grow their money safely while taking calculated risks with portions of their portfolio.

According to a study of private wealth manager data by Kohlberg Kravis Roberts (KKR), the asset allocations for ultra-high net worth investors differ dramatically from other types of investors.

Asset Allocation by Wealth Status

Asset Allocation	Ultra-High Net Worth	Pensions	High Net Worth
Cash	10%	3%	2%
Alternatives	46%	24%	22%
Fixed Income	15%	28%	33%
International Equities	9%	26%	15%
Domestic Equities	20%	20%	28%

As you can see, ultra-high net worth investors have almost half of their money in alternative investments, while investing less than 30% in domestic and international equities. By comparison, the average investor typically has 50% to 90% of their portfolio invested in stocks.

How to Achieve Diversification in Ultra-High Net Worth Portfolios

An ultra-high net worth individual speaking to an advisor on the phone about her asset allocation.

To achieve a diversified portfolio, the ultra-high net worth asset allocation should incorporate the following strategies.

Diversified Assets

Having a diversified portfolio can be a bigger challenge for ultra-high net worth investors. Even when investing a small percentage of your portfolio, the investment could be millions of dollars. Depending on the chosen investment, that could pose concentration risk issues. A financial advisor can help achieve diversification not only among asset classes but also individual investments to reduce these risks.

Alternative Investments

As the study above illustrates, investing in alternative investments is popular among ultra-high net worth investors. This asset class is quite broad and includes a variety of choices, such as real estate, commodities, paintings, classic cars, cryptocurrency, and more. Many of these assets are illiquid with high transaction costs, so they are typically held for longer periods of time. Assessing current value can also be a challenge because they may be unique assets with low turnover.

Cash

For the money that is needed in the short term, it is important to minimize market volatility. As the chart above shows, ultra-high net worth investors often hold more cash in their portfolios than other investors. The difference is more noticeable when expressed in dollars versus percentages. Ultra-high net worth investors with $30 million and 10% in cash have $3 million in cash, compared to high net worth investors with a $1 million portfolio and 2% in cash ($20,000). Financial advisors help investors earn higher yields on this cash allocation without introducing more risk to their portfolios.

Tax Efficient Asset Allocation Strategies for UHNWIs

For UHNWIs, tax efficiency is a key factor in how assets are allocated across different account types and structures. The goal is to reduce tax drag while maintaining a diversified portfolio.

One strategy is placing tax-inefficient assets—such as hedge funds, private credit, high-turnover active funds and high-yield bonds—into tax-deferred structures like private placement life insurance (PPLI), grantor trusts, or deferred annuities. These vehicles allow income and gains to grow without annual taxation, reducing the overall tax burden on the portfolio.

On the other hand, tax-efficient assets—like municipal bonds, low-turnover index funds and ETFs—can be allocated to taxable accounts, where their lower taxable income minimizes current-year tax liability. Assets eligible for long-term capital gains treatment should also be kept in taxable accounts when possible to take advantage of preferential rates.

Finally, UHNWIs may shift a portion of equity exposure to charitable remainder trusts (CRTs) or family limited partnerships (FLPs) to reduce estate taxes and defer capital gains. Strategic asset placement across these structures can improve after-tax returns without changing the overall risk profile of the portfolio.

Bottom Line

An ultra-high net worth individual thinking about his asset allocation.

As an ultra-high net worth investor, it is important to manage your portfolio through all market cycles. Having proper asset allocation allows you to maintain your lifestyle today while also achieving your long-term financial goals. Determining the right ultra-high net worth asset allocation can be a challenge. But, working with a financial planner can help you meet your goals for today and in the future.

Asset Allocation Tips

UHNWIs surround themselves with teams of advisors to manage their wealth, business and personal lives. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Having a diversified portfolio minimizes volatility without sacrificing growth. Nobody can predict which sector will perform the best, so having portions of each sector enables you to participate in its growth. Our asset allocation calculator helps you create a diversified portfolio while meeting your financial goals.