UBS Group, a global banking conglomerate, commented that high net worth clients in Asia were moving away from the US dollar and were accumulating gold, cryptocurrencies, and Chinese assets. Amy Lo, wealth manager for UBS Asia, said that gold was becoming very attractive. She reasoned that geopolitical conflicts and market volatility were the reasons why Asian clients were seeking more stable investments like gold and crypto. UBS clients, many of whom have American portfolios, are now seeking outside exposure to other markets, to minimise risk and to take advantage of a changing market.
Executives from UBS and Morgan Stanley agreed that there was an increase in demand for Chinese assets after America agreed with China for a 90-day pause on tariffs. The executives noticed a revaluation of strategies amongst top-tier investors, with Asian investors considering the Chinese market as a safe haven from further trade disputes. There is also an interest in American growth stocks amongst US investors. Despite the Trump administration’s promise to lower tariffs, investors are starting to move away from US dollar-based investments and preferring gold, crypto, and Chinese assets. Both banks are repositioning their strategies to address the preference change, encouraging clients to diversify portfolios and to build a strategy that can withstand a highly volatile market, such as buying gold and crypto.
Christina Au-Yeung, head of wealth management at Morgan Stanley Asia, said that there was renewed optimism amongst Asian investors after hearing the news about the tariff pause. The optimism also includes a renewed sense of urgency regarding investments in the Asian region, particularly in Chinese markets. Au-Yeung noticed that Chinese clients were paying more attention to risk management strategies and were taking an active interest in their portfolios. Au-Yeung noticed this trend with her wealthiest clients.
Tariff negotiations between America and China have served as a pivot point in the market, especially with Chinese investors, who are repositioning their portfolios to prepare for more market volatility. Morgan Stanley’s Au-Yeung believes that wealthy Chinese clients are taking risk management more seriously post-tariff negotiations. UBS’ Amy Lo noticed that Asian clients are distancing themselves from the US dollar markets and are taking a renewed interest in the Chinese market. Lo comments that these same traders were wary of the Chinese market for years, but now see the market as a haven in the event of further global tensions. These same investors are seeking out gold, crypto, and China. They see these investments as a way to manage risk and maintain a sustainable portfolio. Lo further mentions that these wealthy Asian investors were often US-centric in the past, with few Asian investments in their portfolios. Lo, who has been with UBS for 30 years, said that gold was getting very popular. It is a very curious mix, including crypto, gold, and China. Cryptocurrency, particularly Bitcoin, is often described as a digital form of gold.
On Monday, America and China decided to pause tariffs for 90 days. This means that both China and America will lower tariffs from 125% to just 10% while negotiations are ongoing. This comes as China and America were making tit-for-tat comments regarding tariffs. Trump introduced a range of tariffs at the start of April, which has sent shock waves through the markets. As a result of the tariffs, many banks lowered their forecasts for Chinese companies. Many crypto traders suspected that investors would seek out crypto and gold as a hedge against trade disputes. It seems that, despite a tariff pause, investors, particularly wealthy ones in China, are still considering crypto and gold as a haven from trade conflicts. Bitcoin may become a modern-day ‘gold belt’, which Chinese workers wore when working on the Californian railways. Crypto is even better than a ‘gold belt’ because it can be hidden from view and can contain as much wealth as you can accumulate.
