Some of Asia’s richest families are cutting exposure to US assets, saying President Donald Trump’s tariffs have made the world’s largest economy much less predictable.
Advertisement
One family office managing assets for Chinese billionaires exited its US holdings entirely and will shift the proceeds to Asia. A senior executive at one of Europe’s largest private banks said the scale of the recent sell-off from rich clients and institutions around the world is unprecedented over the past three decades and could be the beginning of a more persistent shift. A top bank executive in Asia got rid of 60 per cent of US assets from his own portfolio, saying it’s safer to hold cash and gold.
About 10 family offices and advisers to the ultra-rich who oversee billions of dollars told Bloomberg they’re reducing their exposure or freezing investments, mostly in US equities and Treasuries. They cite rapid policy shifts, uncertainty and the risk of a recession. Some of them asked not to be identified discussing private investment decisions.
“For the first time, some families are considering partial divestment from US holdings,” Henry Hau, chief executive officer of Hong-Kong based Infinity Family Office, said in an interview. “These families weathered the dot-com bubble, the Asian financial crisis, and the 2008 global crisis while maintaining faith in US assets. Now, however, they are exploring reallocating 20 per cent-30 per cent of their US portfolios to China and Europe.”
The pullback marks a rapid change from just a few months ago, when many in Asia’s business elite cheered Trump’s election win, sending share prices at banks and major tech firms to record highs.
Advertisement
Hong Kong and mainland China, which have been dealing with the fallout of a property crisis in recent years, are among the key markets benefiting from the US pull-out, as well as Europe. Hong Kong’s benchmark index, on which many key Chinese firms are listed, has gained more than 13 per cent this year, while the S&P 500 is down about 3 per cent.