Due to the interconnectivity of modern economic activities, the trade war that kicked off between China and the US has quickly expanded to include the entire world, potentially fragmenting global supply chains and prompting some economies to move away from globalization towards regionalism.

These developments are affecting the global wealth management industry, spurring wealthy families and high-net-worth individuals to adjust their asset allocations to buffer any adverse impacts and protect their investment returns.

Over the next 12 months, more than two-thirds ( 70% ) of family offices surveyed, according to Swiss bank UBS’ annual Global Family Office Report 2025, identify the trade war as a major threat to their financial objectives. The second most pressing concern – cited by more than half ( 52% ) – is a major geopolitical conflict, followed by inflation.

Looking five years ahead, the percentage of family offices concerned about geopolitical conflict rose to 61%, while 53% expresses concern about a global recession potentially triggered by ongoing trade disputes, finds the report, which features insights from 317 single-family offices across more than 30 markets worldwide, 28% of which hail from Europe, 23% from Asia-Pacific, 13% US, 12% Latin America, 12% Switzerland and 12% Middle East.

Risks over the next 12 months and five years

Source: UBS

Wealth management firms in Asia echo these concerns. “Many of our clients are SME [small and medium-sized enterprise] entrepreneurs,” states Grant Pan, CFO of Noah Holdings and CEO of Ark Hong Kong, speaking at the Greenwich Economic Forum in Hong Kong on May 22, “and their businesses are exposed to varying degrees of foreign trade.” Trade tensions, he adds, not only influence investment strategy, but also directly impact business income, prompting entrepreneurs to rethink their financial planning.

Despite these concerns, 59% of family offices plan to maintain the same level of portfolio risk in 2025 as in 2024, the UBS report shows, remaining committed to their long-term investment objectives. However, 38% report difficulty in finding effective risk-offsetting strategies, while 29% point to the unpredictability of traditional safe-haven assets due to unstable correlations.

In response, 40% of family offices are placing greater emphasis on manager selection and active management to enhance diversification. Hedge funds ( 31% ) are another popular solution for family office, while others are increasing allocations to illiquid assets ( 27% ) and high-quality, short-duration fixed income ( 26% ).

Precious metals have also gained traction. Nearly one-fifth ( 19% ) of family offices say they use them as part of their strategy, and 21% anticipate a moderate or significant increase in their allocation over the next five years.

“Diversification is key,” says Benjamin Deng, Sun Life’s president of Asia asset management, also speaking at the Greenwich Economic Forum. “Investors are looking into alternative assets like commodities – especially gold and copper, which have seen significant price increases.

The price of gold, currently trading at around US$3,300 to US$3,400 per ounce, has surged more than 40% compared with a year ago, representing a 25% year-to-date increase. Copper has also seen a strong performance, with a 16% year-to-date gain in 2025.

Diversification, risk mitigation

In an unstable time for global trade and the economy, a shift towards more liquid markets in strategic asset allocation is underway. Some family offices are increasing their weightings in developed market equities and bonds, the UBS report shares, as they seek liquid opportunities for capital growth and yield in a volatile environment.

Increasingly, there are opportunities to access secular growth trends in public equities – areas that were mostly limited to private equity just a few years ago. These trends range from generative artificial intelligence ( AI ) to energy, natural resources and longevity-focused stocks.

In today’s technology-driven world, Deng emphasizes, there are significant investment opportunities in computing power related to AI. This computing infrastructure is essential for handling complex algorithms and large datasets, which form the foundation of many AI applications.

Emerging markets

Unfortunately, family offices in the US and Europe, according to the UBS report, are more cautious about emerging markets than their peers in Asia-Pacific, Latin America and the Middle East. This hesitation stems from a prolonged period of disappointing returns in these markets where economic growth has often failed to translate into strong equity market performance.

Globally, family offices allocated just 4% to emerging market equities and 3% to emerging market bonds in 2024. However, over the next 12 months, the report shares, they are most likely to increase their exposure to India and China.

When it comes to barriers to investing in emerging markets, geopolitical concerns are cited most frequently ( 56% ), followed by political uncertainty or the risk of sovereign default ( 55% ). Currency devaluation and inflation ( 48% ), as well as legal uncertainty or lack of regulatory frameworks ( 51% ), are also cited as posing significant deterrents.

Continuing a trend observed in recent years, North America ( 53% ) and Western Europe ( 26% ) remain the preferred investment destinations of those surveyed, accounting for nearly four-fifths of all assets. Allocations to Asia-Pacific ( excluding Greater China ) and Greater China have declined slightly, each representing only 7% of total allocations.

Southeast Asia

When it comes to Southeast Asian family offices, traditional asset classes make up 69% of their portfolios, with 31% in equities and 27% in fixed income. The remaining 31% is allocated to alternative asset classes, including 11% in private equity and 6% in private debt.

Regionally, 56% of their portfolios are allocated to North America, followed by Asia-Pacific ( excluding Greater China ) at 21% and Western Europe at 12%.

Looking ahead, 33% of Southeast Asian family offices plan to increase their exposure to Greater China over the next 12 months, according to UBS’s report, while 28% intend to raise their exposure to India and Taiwan.