Family offices are planning the biggest changes to their portfolios in years, with many moving money out of the U.S., according to a new survey.
Fully 60% of family offices plan to make strategic changes to their investment allocation in the next year – about twice the level of the past five years, according to the UBS Global Family Office Report. Among those making changes, many are trimming their U.S. holdings and adding to emerging markets.
Globally, North America is the only region where family offices plan to reduce their allocation in the next 12 months. They plan to add in Latin America and Africa, they said.
"Last year, all of the family offices were super concerned about global trade tariffs tensions," said John Mathews, UBS head of private wealth management for the Americas. "Today it's really shifted to geopolitical tensions around the world, global debt, and now interest rates. And not just the short-term implications, but the longer-term implications of these as well."
The pullback reflects a broader shift away from the U.S. by family offices, the private investment arms of the wealthiest families. America's highly concentrated stock market and fears of an AI bubble, tariffs, a falling dollar, volatile economic policies and rising debt and bond yields have caused many family offices to dial back their U.S. exposure and spread more of their money around the world.
Advisors caution that it's not a wholesale "sell America" trade. Rather, international family offices want to be more diversified geographically as global crises grow.
The wars in Ukraine and Iran, changing tariffs, immigration and debt battles have all made the world a more complicated investing landscape. With no real safe haven, the best strategy is to balance risks across the world.
The new catchphrase in family office investing is "jurisdictional diversification," spreading money in multiple countries to hedge risk. Two thirds of family offices now have their bankable assets in at least three jurisdictions, according to the UBS survey. Nearly a third have them in at least four jurisdictions, including Latin America, the U.S., China, Europe, the Middle East and Asia.
A chief goal among family offices is to reduce their U.S. dollar exposure, or what some are calling "de-dollarization." More than a quarter of family offices plan to lower their holdings of U.S. dollar-denominated assets, according to the UBS survey. Two thirds of family offices said they expect confidence in the U.S. dollar's reserve role to fall, and nearly half said they are overexposed to the dollar.
The Swiss franc and the euro are the preferred currencies for diversification, according to the survey.
Source: Drudge Report
