Asian UHNWIs find way to fight geopolitics, cash barely an option
As global tensions continue to simmer, high net worth individuals (HNWIs) in Asia remain divided on whether geopolitical developments represent risk or reward in 2025.
The survey, which polled 200 HNWIs in Hong Kong and Singapore, revealed a striking divergence in sentiment around geopolitics: with 27% of respondents viewing it as a leading investment risk, while 22% believe it offers lucrative opportunities.
“This survey shows us that HNWIs are experienced in adopting a multi-asset investment strategy to capture the diversification benefits from multiple markets and asset classes,” Lok Yim, regional head of global private banking, Asia Pacific, HSBC, noted in the survey.
Stay invested vs stick with cash
Despite gepolitical tensions and concerns around US-China relations, confidence in Asia’s economic prospects remains resilient.
An overwhelming 92% of respondents maintain a neutral to positive outlook for the region, signalling that while geopolitics is a pressing concern, it hasn’t derailed long-term confidence in the region’s growth story.
To manage heightened volatility, nearly half (46%) of investors are leaning into portfolio diversification and active switching strategies. The “stay invested” mindset continues to dominate, with only 11% opting to hold cash, a sign that investors are adapting rather than retreating.
Fixed income + alts = the best option?
When it comes to asset classes, two-thirds of investors gravitate towards more stable income streams and investment options, with 37% citing fixed income as their top long-term asset class of choice in the next decade, whereas 30% choose foreign currencies and commodities for their long-term portfolios. Fifteen percent of HNWIs believe alternative investments offer the best long-term opportunities.
North America still tops the list of preferred long-term investment destinations, with 43% of respondents eyeing the region for opportunities over the next decade. Asia follows closely, named by 28% of HNWIs as their second-most favourable region, suggesting that investors are balancing geopolitical risk with regional growth potential.
The survey also explored perceptions of the impact of artificial intelligence (AI) on corporate earnings. While nearly 40% of respondents believe AI is an over-hyped profit driver, 31% think it will enhance corporate efficiency despite increased costs. Additionally, 24% consider AI a significant contributor to earnings growth.