Wealthy Asian Clients of UBS Are Ditching U.S. Dollar Assets for Gold, Bitcoin, and Chinese Markets

Wealthy Asian clients of Swiss banking giant UBS Group are rapidly changing investment preferences, abandoning U.S. dollar assets in favor of gold, cryptocurrencies, and Chinese markets.

Wealthy Asian clients of Swiss banking giant UBS Group (NYSE: UBS) are rapidly changing their investment preferences, abandoning U.S. dollar assets in favor of gold, cryptocurrencies, and Chinese markets, a top wealth manager at the bank said on Friday.

“Gold is becoming very popular,” Amy Lo, co-head of wealth management for UBS in Asia, said while speaking at the Bloomberg New Voices event in Hong Kong.

Lo said that the shift in investment preferences is being driven by increasing geopolitical uncertainty and persistent market volatility. Investors who were traditionally focused on U.S.-related assets are now seeking greater opportunities in alternative asset classes, including cryptocurrencies, commodities, and other currencies.

China is regaining investor interest

“Volatility is definitely going to stay with us,” Lo added, noting that this is prompting clients to rebalance their portfolios toward perceived safe havens and growth opportunities in new regions.

China, after years of waning interest, is also regaining appeal among the ultra-wealthy. Lo noted that clients who had previously avoided investing in China are now actively pursuing investment opportunities in the country.

Hong Kong's stock index, largely made up of Chinese companies, has become one of the best-performing indices in the world in 2024, further fueling interest.

Bank of America's latest survey of fund managers also shows that global fund managers significantly reduced their U.S. dollar positions in May, marking the most undervalued position in 19 years.

Truce in the U.S.-China tariff war

Christina Au-Yeung, head of investment services at Morgan Stanley (NYSE:MS) Private Wealth Management Asia, told Bloomberg that the recent tariff truce between the U.S. and China has created new optimism among investors.

“We are seeing the emergence of really interesting themes coming back to China,” Au-Yeung added.

The investment executive also noted that there is a growing awareness of risk among Asia's wealthiest clients. As a result, her firm now recommends a balanced portfolio allocation of 40% fixed income instruments, 40% equities, 15% alternative investments, and the rest in cash or cash equivalents.

On Saturday, the U.S. and China reached an agreement to partially reduce tariffs on each other’s goods.

Under the agreement, the U.S. will lower tariffs on Chinese imports from 145% to 30%, while China will cut duties on U.S. goods from 125% to 10%.

The trend away from dollar-denominated assets to alternative investments speaks to a broader shift in global investment strategies, especially among ultra-wealthy investors in Asia. The surging interest in gold, Bitcoin, and Chinese markets showcases not only a diversification of portfolios but also a reassessment of the long-term prospects of traditional U.S. dollar assets.