Indeed, 2025 has been a year of market volatility and unease caused by uncertainties ranging from the threat of a global trade war to increasing risks of global recession. Through all that, global family offices appear to remain well-positioned to weather out the volatility as this year's edition of UBS’ Global Family Office Report reiterated the diversified, all-weather strategic asset allocation of the many family offices surveyed.
According to the report, family offices in the Apac region were found to favour bonds and equities of developed markets in 2024 and do still plan to increase their strategic allocations in these assets going into the next five years.
Apac family offices averaged out a 20% asset allocation towards bonds of developed markets and a 24% allocation towards developed market equities. Family offices in Southeast Asia specifically averaged out an allocation of 22% to developed market bonds and 27% to developed market equities.
“The move towards bonds in my view, comes down to investors moving away from cash given that interest rates are falling,” says LH Koh, UBS’s head of global family and institutional wealth in Apac.
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In previous years, investors held on to cash (or cash equivalents) due to a favourable environment of high interest rates. However, with interest rates expected to fall this year, allocations of cash as part of managed assets decrease for family offices in Apac, from about 14% in 2023 to 12% in 2024.
As such, family offices have begun allocating their cash towards high quality, investment-grade bonds of developed markets as an alternative to preserve wealth while remaining risk-averse amidst uncertainty.
For 2025, global family offices are planning to increase holdings in developed market bonds to 17% up from 15% in 2024.
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Equity wise, the sentiment towards increasing allocation towards developed market equities remained strong as it has been since 2019, with global family offices planning to allocate 29% of their assets towards developed market equities up from a 2024 allocation of 26% which remains in line with an increasing trend of allocation towards this asset class since 2019, where global family offices had an average allocation of 23% towards this asset class.
Over the next five years, 28% of Apac family offices are planning to increase their allocations in developed market bonds while 48% of them are planning to increase allocations towards developed market equities. Interest in investing more in equities of developing markets in the next five years also remained high with 40% of Apac family offices planning to increase investments in the asset class.
Besides the traditional equities and bonds, increased uncertainty has raised interest among family offices towards alternative investments such as gold.
Back in April, at the height of uncertainty over President Donald Trump’s tariff policies, gold prices hit a record high of US$3500 ($4491.55) before pulling back to US$3300 in May.
“Gold does not have a significant allocation (about 2% allocation across global family offices), but there is still a lot of interest to look at gold. Our Chief Investment Officer believes that there is still a structural demand for gold and we are still largely positive. What we are seeing is more clients buying gold and buying into gold funds,” says Koh.
He also notes that over the past five years, there has been an increasing asset allocation by family offices towards private debt as an alternative investment.
“Private debt acts as a good hedge against interest rate changes and investments in private debt are usually managed by fund houses with deep expertise, providing some assurance. Additionally, a lot of these private debts are senior debts, so the risk profile is good and default rates are low,” says Koh.
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Compared to 2021 levels, where private debt asset allocation by family offices was at a mere 2%, family offices are planning to allocate an average of 5% towards private debt in 2025.
Family offices in Apac (excluding Greater China) were particularly more in favour of private debt compared to other regions. With an allocation of 5% compared to the average of 3 to 4% by family offices in the US, Latin America, China, Europe and the Middle East.
Strong interest in Apac
Across eight different regions around the world, UBS’ report found that Apac (excluding China) emerged as the preferred region where most family offices globally (35%) plan to increase their investments in the next five years.
The sentiment resonated strongly amongst Apac family offices in particular, with 55% of them planning to increase investments to Apac (excluding China) in the next five years.
The report also mentions that Apac family offices were relatively interested in increasing exposure in their investments into Greater China, with 39% of Apac family offices planning to increase exposure to the region in the next 12 months and about 30% of Apac family offices planning allocate more of their assets into the region in the next five years.
Koh notes that while China has an abundance of opportunities for investments, the country is still heavily reliant on its domestic market and faces the challenges of domestic consumption, which is expected to be hit by the trade war with the US. He also points out that a draggy real estate market will continue to present another headwind for the Chinese economy if not managed right.
While challenges remain, Koh believes that there's an improvement in market sentiment. Investors going into the Chinese market are particularly interested in early-stage ventures in technology and green sectors, especially in artificial intelligence (AI), electric vehicles (EVs) and the renewable energy space.
The Chinese government's efforts to reassure private businesses and stabilise the real estate sector are also seen as positive signals for potential investors.
Trade war concerns
A global trade war was flagged as 2025’s greatest risk by family offices.
When asked about the greatest threats to their financial objectives over the next 12 months, about 70% of those surveyed highlighted the risk of a global trade war, followed by the risk of geopolitical conflict at 52% of family offices surveyed.
“Even with the survey largely conducted in the first quarter, family offices were already acutely aware of the challenges posed by a global trade war, identifying it as the year’s greatest risk,” says Benjamin Cavalli, head of strategic clients at UBS Global Wealth Management.
Risks of an escalating global trade war peaked back in early April after President Trump announced a slew of so-called reciprocal tariffs on every country as part of his ‘Liberation Day’ announcement on April 2. US equity markets plunged in the wake of the announcement, with the S&P 500 index sliding over 10% across the span of two days from April 3 to April 4, while the tech-heavy Nasdaq Composite dropped by 11.2% across the same time period.
While the subsequent announcements of 90-day pullbacks on reciprocal tariffs have helped US equity markets recover, uncertainty still shrouds the future of President Trump’s tariff plans after the 90-day pullbacks, which could potentially rattle global markets going into the second half of 2025.
In terms of perceived risks over the next five years, family offices highlighted the risks that may emerge following trade disputes, with about 61% of family offices surveyed anxious about geopolitical risks conflicts from trade disputes and 53% of family offices surveyed anxious about a global recession as a result of trade disputes.
Apac family offices were particularly concerned about the risk of a global recession in the next five years, with 61% of Apac family offices surveyed viewing it as the biggest threat with regards to their financial objectives.
The third biggest risk in the eyes of global family offices in the next five years is the looming risk of a debt crisis, with about 50% of family offices surveyed viewing it as a risk.
The United States holds the highest budget deficits of any country in the world, standing at a whopping US$36 trillion of debt, which puts the country’s debt to GDP ratio at 122% which places them among the top 10 countries in the world with the highest debt-to-GDP ratio.
The US’ growing debt will be further compounded by President Trump’s new ‘big, beautiful’ tax-and-spending budget bill which is expected to add another US$2.5 trillion to its debt according to nonpartisan research groups studying the bill proposal.
Rating agency Moody’s also recently downgraded US government credit from triple-A to ‘Aa1’ on May 16, citing that US government debt and interest payment ratios have risen to levels significantly higher than similarly rated sovereigns.
Being one of the biggest bond issuers, the US government’s deepening debt raises concerns over the US government’s ability to pay it back, leading to a potential increase in default risks. Considering the threat of a trade war on equities, a debt crisis threatening the bond market paints an uneasy picture for the two traditional asset classes.
“In the past, we would look at bonds and equities as going in the opposite direction. In the recent period, this no longer seems to be the case. This is why we’re looking at hedge funds as well as precious metals as diversifiers,” says a managing director of a Hong Kong family office.
The Global Family Report by UBS captures the views of 317 of the bank's family office clients and offers the world a “snapshot into the thinking of family offices around the world, their objectives, preferences and concerns”, says Yves-Alain Sommerhalder, Head of Apac Global Wealth Management Solutions at UBS.
“While the global macroeconomic and political environment continues to be marked by rapid changes and a high degree of uncertainty, this survey offers a glimpse of what we can expect over the coming five years,” Sommerhalder adds.
