UBS Group's high-net-worth clients are accelerating their withdrawal from US dollar assets, turning towards gold, cryptocurrencies, and the Chinese market. Amy Lo, Co-Head of Wealth Management Asia at UBS, pointed out at the Bloomberg New Voices event held in Hong Kong on May 14th that investors are actively seeking asset allocation diversification against the backdrop of US-China trade tensions.
New Hedge Darling: Crypto Assets
Amy Lo stated that her high-net-worth clients are increasingly moving funds out of investment portfolios that are "quite US-centric". Under this trend, gold is highly favored for its traditional hedging function and ability to offset US dollar fluctuations, and she directly said: "Gold is very popular now."
Moreover, Basel III has reclassified gold as a Tier 1 asset, not only enhancing its status as a highly liquid asset but also partially explaining gold's recent strong performance.
Meanwhile, despite high volatility, cryptocurrencies (especially Bitcoin) are emerging as a new hedge asset that wealthy individuals are becoming interested in, attracting investors seeking non-correlated assets due to their unique risk diversification characteristics. Funds are also flowing into commodities, other alternative assets, and the Chinese market with growth potential.
These trends highlight the strong demand from large investors for hedging, risk diversification, and finding new growth points during ongoing market volatility caused by US-China trade tensions.
Looking ahead, Amy Lo's expectation is: "Volatility will certainly continue." The asset migration of the wealthy will gradually change the market.
