Some of Asia’s richest families have had enough of investing in U.S. markets and President Trump is the person they are blaming for their decision.
U.S. Economic Nerves
According to a report in Bloomberg, Asian billionaires are cutting exposure to U.S. assets, mainly equities and treasuries, because they are nervous about both the present and future of the nation’s economy under Trump.
They believe that Trump has made the world’s largest economy too unpredictable given his tariffs strategy which has imposed huge levies on countries all over the world from China to Mexico, the EU and Canada.
In particular they fear the prospect of a U.S. recession as a result of his policies. The Federal Reserve is also worried about the state of the U.S. economy.
According to the Bloomberg report, one family office managing assets for Chinese billionaires has exited its U.S. holdings entirely and will shift the proceeds to Asia. It was also reported that a senior executive at one of Europe’s largest private banks said the scale of the recent sell-off from “rich clients and institutions around the world is unprecedented over the past three decades and could be the beginning of a more persistent shift.”
A top bank executive in Asia reportedly exited 60% of U.S. assets from his own portfolio, saying it’s safer to hold cash and gold.
Worse Than Dot-Com Bubble
Overall, around 10 family offices and advisers to ultra-rich people said they were reducing their exposure or freezing investments.
“For the first time, some families are considering partial divestment from US holdings,” Henry Hau, chief executive officer of Hong-Kong based Infinity Family Office, said. He added, that these families weathered the dot-com bubble in the early 2000s, the Asian financial crisis, and the 2008 global crisis while maintaining faith in US assets.
“Now, however, they are exploring reallocating 20%-30% of their U.S. portfolios to China and Europe,” he said.
It came as figures showed that U.S. equity funds saw outflows for a fourth straight week through May 7, driven by uncertainties around trade tariffs.
Investors withdrew a net $16.22 billion from U.S. equity funds during the week, the largest weekly net sales since March 19, according to LSEG Lipper.
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