US-inflicted global tariff tensions, which had hurt the US economy and could lead to a difficult domestic business environment, created a “critical moment for all the global economic major players and asset allocators to get rid of the US, in particular US equities and Treasuries, to maintain lower risk-return ratios”, said CEO Jim Kwok who is also vice-chairman of the Family Office Association Hong Kong. A lower risk-return ratio means a more favourable trade-off between risk and reward.
Topaz has become more defensive and diversified after the recent tariff tensions to help its clients hedge risks in the US and US dollar-denominated assets. The multifamily office’s overall exposure to the US has dropped to about 34 per cent from 52 per cent in the first half of 2023, while it has increased its exposure to China, Japan and Asia-Pacific more broadly, as well as to commodities and precious metals.
“We find some clues in the market and adjust our exposures bit by bit,” Kwok said. For example, Topaz unloaded some Tesla holdings after seeing Elon Musk, the US electric-vehicle firm’s CEO, become involved in the Trump administration.
The move meant Musk was seemingly more occupied by his political responsibilities than his business, Kwok said. Tesla’s stock has lost 30 per cent this year.
