Global trade disputes worry family offices more than anything else, with many shifting to defensive stocks to minimize the impact of tariffs on their portfolios, according to a Citi Wealth report based on a survey of 346 family offices in 45 countries conducted in June and July.
“Tariff negotiations, airstrikes against Iran, U.S. budgetary spending and concerns over Federal Reserve independence are among the complications faced by those overseeing investment portfolios on behalf of some of the world’s most dynamic families,” Citi Wealth CIO Kate Moore stated in the report.
The issue of trade wars was cited by 60% of family offices, with concerns over U.S.-China relations well behind at 43%, followed by 37% who said their biggest concern was the return of rising inflation. Trade dispute concerns were even greater for family offices in North America and the Asia-Pacific region, cited by 65% and 61% of respondents, respectively. Meanwhile, 53% of family office respondents in Asia Pacific said they were most worried about U.S. relations with China.
In light of these market-moving issues, nearly two-thirds of family offices made moves to gird their portfolio, with 39% citing active management as their response. The report also noted that family offices’ interest in seeking analyses of their liquid and illiquid risk exposures across all their providers has been increasing. The report added that this is a sign of hedging and active investment strategies.
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Regarding the use of artificial intelligence, the portion of family offices adopting AI has grown significantly from last year: According to Citi Wealth, AI use in investment performance reporting and portfolio construction more than doubled.
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