Executives from Morgan Stanley and UBS Group reveal that super-rich individuals are bullish on China's assets, with a surge in allocations to Gold and Cryptos!
Executives from Morgan Stanley and UBS Group, who provide Consulting Services to Asia's super-rich, found that optimism among investors regarding China has resurfaced following progress in US-China trade negotiations over the weekend.
Christina Au-Yeung, head of investment management services at Morgan Stanley's private wealth management in Asia, said in an interview during Bloomberg's "New Voices" event in Hong Kong on Tuesday that the breakthrough in US-China trade relations has created conditions for the rebound of US growth stocks and the upcoming "re-pricing" in China. Amy Lo, co-head of UBS Asia Wealth Management, noted that clients' interest in the Chinese market is recovering.
"In recent months, at various international meetings, they actively ask me about investment opportunities in China," Lo said.
The trend of "Buying America" swept across the market this week, leading to renewed prosperity in the US market. Hong Kong's benchmark stock index is one of the best-performing indices globally this year, featuring several Chinese companies.
Au-Yeung stated that the easing of tariffs "brings very interesting opportunities for both countries."
Au-Yeung, in an interview with Annabelle Droulers, mentioned that the USA still has the "deepest and highest-quality market," while China's valuation is "not high."
She said, "We see that this certainty is indeed starting to improve the prospects of US growth companies. As China shifts from being the world's factory to an independent global innovator, we are seeing truly interesting themes emerging in China again."
Her team had expected that the tariff tensions would ease quickly, and indeed, it came 'suddenly and sharply.' However, she also admitted that the 90-day window is very short, indicating that reaching a comprehensive agreement within such a tight timeframe may be challenging.
She said that while Morgan Stanley is still setting a target total ROI of 7% to 8% annually over 7 to 10 years for its ultra-high-net-worth clients, achieving this ROI is 'very difficult' due to the current volatility being much higher than during the post-financial crisis era.
She advised her wealthy clients to allocate their Global Assets in a ratio of 40-40-15 among fixed income, Stocks, and alternative investments, with the remainder in Cash and Cash equivalents.
Nevertheless, UBS Group's wealthy clients are increasingly moving away from dollar assets, turning to Gold, Cryptos, and China. Lo said during an interview with Yvonne Man at the same event, 'Volatility will certainly continue to exist.'
She stated that trade tensions are prompting investors to diversify their held Assets, which traditionally have been 'quite US-centric.' In addition to looking for Other currencies, they are also allocating more funds into Cryptos, CSI Commodity Equity Index, and alternative Assets.
Lo, who has worked at UBS Group for about 30 years, said, 'Gold is becoming increasingly popular.'
Au-Yeung said, 'While tariff reductions improved market sentiment, Morgan Stanley has also seen changes in client behavior, especially in Asia, where entrepreneurs and Asset owners are shifting from complete excess return targets to a more conscious risk budgeting approach.'
She said, 'We see clients becoming more cautious about the risks and exposures they are taking on, with very clear and fixed ideas about volatility, budgeting, and the design objectives of each part of the investment portfolio.'
Later on Monday, Ken Griffin, the founder of Citadel Fund, stated in an interview that as the market surged due to a truce in the trade war, he reflected on the past month and believed it was best to Hold Cash and wait.
For Au-Yeung, navigating market fluctuations in a historic geopolitical crisis is like drifting in Autos—unpredictable, powerful, and requiring precision. If not handled well, things can quickly spiral out of control.
When asked about her hobbies, she said, "I love drifting Autos. You don't need to use the steering wheel; you can move the car in the direction you want by simply using the accelerator. The better your feel for the accelerator, the stronger your ability to control the machine. I think this is something we can all apply in our work."
