The Big Shift in Investing

For decades, the “60/40 portfolio” was gospel — 60% equities for growth, 40% bonds for stability. It worked well in a world of falling rates and predictable inflation. But the shocks of 2023 and 2024 shattered that illusion. Inflation surged, bonds lost value alongside equities, and investors discovered that the so-called “balanced portfolio” was anything but safe.

That old playbook is dead. The new model — already embraced by sophisticated investors — is the 50/30/20 portfolio:

• 50% equities for long-term growth
• 30% bonds for defensive stability
• 20% alternatives for fixed returns, diversification, and inflation protection

And at the core of that 20% allocation sits insured, capital-protected litigation funding.

Why Litigation Funding Is Redefining Alternatives

Litigation funding has stepped forward as one of the most resilient and attractive private asset alternatives in today’s market. Structured correctly, it gives investors the holy grail: double-digit fixed returns plus capital protection.

• Predictable hard-currency yield. Returns of 11–15% p.a. in $, £, or € offer a contractual income stream that comfortably beats inflation.
• Capital protection is built-in. Policies are backed by ATE insurance and performance guarantee surety bonds, ensuring that investor capital is insulated even in the event of case losses.
• Uncorrelated to markets. Case outcomes have nothing to do with stock, bond, or property cycles. This makes litigation funding a genuine diversifier, smoothing overall portfolio volatility.
• Expanding demand. The global legal market continues to expand, with demand for funding growing in commercial claims, class actions, and international arbitration. Investors are financing justice — and profiting from its outcomes.
• Technology and oversight. Funders now use digital case-management systems, data analytics, and independent trustees to enhance transparency and strengthen risk management.

Diversification must Evolve – 50/30/20 Portfolio

The lesson of the past two years is clear: diversification must evolve. A 60/40 portfolio that loses on both sides is no longer fit for purpose. The 50/30/20 allocation is the natural evolution, and within that 20% alternatives bucket, insured litigation funding is emerging as a flagship strategy.

Why? Because it combines the fixed income qualities of bonds with the upside of alternatives — without exposing investors to the volatility of equity markets. It is capital-protected, yield-driven, and uncorrelated.

In short: litigation funding is what bonds used to be, only stronger!

Quality Group’s Approach

At Quality Group, we position litigation funding as a cornerstone of the alternative allocation. Our focus:

• Capital preservation first — every opportunity we pursue is structured with insured protection and legal charges security.
• Hard-currency income — fixed returns in £, $ and € to shield investors from emerging market currency erosion.
• Passive, predictable cashflow — double-digit returns that can be reinvested or withdrawn, aligning with long-term wealth strategies.

This isn’t about speculation. It’s about building resilient portfolios that outlast inflation, currency shocks, and market downturns.

The Road Ahead

As 2025 unfolds into 2026, investors are embracing the 50/30/20 framework as the blueprint for financial resilience. Within that framework, insured litigation funding is rapidly becoming the anchor of the 20% alternatives slice — offering exactly what modern portfolios need.

Security, Diversification, Superior Returns

Smarter thinking. Litigation funding isn’t just another product. It’s a new foundation for passive income and wealth preservation in a world where traditional tools no longer guarantee safety.

Bottom line: The era of the old balanced portfolio is over. The future belongs to investors who adapt — and those who place insured, capital-protected litigation funding at the centre of their alternative strategies.

Ready to explore private market opportunities?
Let’s connect and discuss how these trends can shape your portfolio