UBS: Asia's wealthy are shifting their assets towards gold, Crypto Assets, and the Chinese market, reducing their dollar positions.

As geopolitical risks and market fluctuations intensify, high-net-worth individuals in Asia are readjusting their investment allocations, shifting from previously relied-upon dollar assets to gold, crypto assets, and the Chinese market. International financial institutions such as UBS and Morgan Stanley point out that this wave of asset transfer demonstrates investors' heightened awareness of risks in the global financial system, while also showing active interest in emerging investment targets.

Gold and Crypto Assets Popularity Soars, Asian Tycoons Turn to "Alternative Safe Havens"

UBS Group ( Asia Wealth Management Head Amy Lo recently pointed out at the Bloomberg New Voices Forum in Hong Kong that high-net-worth clients in Asia are gradually reducing their holdings in dollar assets, opting instead to increase their investments in gold, Crypto Assets, and other assets. She emphasized: "Gold has become very popular."

She analyzed that the main reasons for this shift may be the "rising geopolitical uncertainty" and the "increased fluctuation in the U.S. market." Investors no longer view the U.S. as the sole investment core, but instead seek a more diversified asset portfolio. In addition to gold and Bitcoin, other commodities and foreign currency assets have also become the focus:

Fluctuation will continue to exist, and investors are reconfiguring, seeking options that offer both security and growth.

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Investors are optimistic about the recovery of the Chinese market, and the impressive performance of Hong Kong stocks has entered the global spotlight.

Despite the weakening of the Chinese market in recent years, the situation has clearly changed recently. Amy Lo revealed that clients who previously avoided the Chinese market are now proactively inquiring about related investment opportunities, indicating that the attractiveness of Chinese assets is on the rise. Among them, the Hong Kong Hang Seng Index is one of the best-performing major indices globally in 2024, once again catching the eyes of investors.

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UBS emphasizes that Hong Kong has indeed successfully attracted external capital to flow back in:

Investors are not only interested in Chinese stocks but are also gradually considering bond and fund allocations related to China.

The easing of the US-China tariff war has boosted optimism, leading to a shift in Asian asset allocation strategies towards balance.

Christina Au-Yeung, head of Morgan Stanley's Asia Private Wealth Management Investment Services, also stated at the same forum that the recent temporary tariff agreement reached between the US and China has injected a shot of confidence into the market:

We have observed that many interesting investment themes have begun to emerge in the Chinese market.

She stated that the event has strengthened investors' confidence in the Chinese market, while also reflecting an increase in risk awareness among Asia's wealthy elite. The bank recommends that clients adopt a more balanced investment portfolio: "40% in fixed income and stocks, 15% in alternative assets, and the remainder in cash or equivalent assets." to enhance overall resilience.

Bitcoin's attention is increasing, with institutions and governments entering the market simultaneously.

As funds flow out of dollar assets, crypto assets are gradually coming to the forefront. According to Galaxy Digital co-portfolio manager Ian Kolman, Bitcoin is increasingly being viewed as a digital reserve asset, attracting interest from institutional investors, exchange-traded funds )ETF(, and even governments.

The supply and demand dynamics of Bitcoin are solidifying its status as a mature digital reserve asset.

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Jay Jacobs, the head of BlackRock's active ETF, also pointed out at the end of April that more and more countries are starting to reduce their holdings of dollar assets and are turning to gold and Bitcoin to build a more robust foreign exchange reserve structure.

The dollar's dominance is loosening, marking the largest reduction wave in 19 years.

According to the latest fund manager survey released by Bank of America )BofA(, global funds significantly reduced their allocation to dollar assets in May, marking the largest reduction in 19 years. This further confirms the downward trend in market confidence in the dollar and reflects the rapid transfer of assets that is currently underway.

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With the restructuring of geopolitical dynamics and changes in monetary policy, Asian billionaires are gradually readjusting their asset allocations. From gold and Bitcoin to the resurgence of the Chinese market, investors are preparing for the next wave of global financial fluctuations.

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