What's Happening?
Family offices in North America are reassessing their investment strategies following President Trump's tariff announcement earlier this year. According to a survey by RBC Wealth Management and Campden
Wealth, 52% of respondents from 141 investment firms believe cash and liquid assets will yield the best returns over the next year. The survey also indicates a shift in investment priorities, with artificial intelligence gaining traction among 30% of respondents. Expectations for 2025 returns have decreased, with an average expected portfolio return of 5%, down from 11% in 2024. The survey highlights a growing concern over market volatility and geopolitical tensions, influencing family offices to prioritize liquidity over diversification.
Why It's Important?
The shift in investment strategies among family offices reflects broader economic uncertainties, particularly related to tariffs and geopolitical tensions. This cautious approach may impact the flow of capital into various sectors, potentially affecting growth equities and defense industries, which were previously favored. The emphasis on liquidity suggests a defensive posture, aiming to mitigate risks associated with currency fluctuations and market instability. As family offices manage significant wealth, their investment decisions can influence broader market trends and economic stability, affecting stakeholders across industries.
What's Next?
Family offices are likely to continue monitoring economic indicators and geopolitical developments to adjust their strategies accordingly. The focus on liquidity may lead to increased investments in stable assets, such as bonds and cash equivalents, while exploring opportunities in emerging technologies like artificial intelligence. Stakeholders, including policymakers and financial institutions, may respond by offering products and services that cater to the evolving needs of these high-net-worth investors. The ongoing tariff discussions and geopolitical tensions will remain key factors influencing investment decisions.
