Global Trade Wars Loom as Top Investment Risk in 2025: UBS Report

The UBS Global Family Office Report 2025 identifies global trade wars as the foremost threat to investments in the coming year, with geopolitical instability and inflation also notable concerns. Conducted in the first quarter of 2025, the survey found that 70 percent of respondents view trade wars as the greatest risk to achieving their financial objectives within the next 12 months.

Despite these apprehensions, family offices foresaw the challenges even before the Trump administration's tariff announcements. Over the next five years, they remain vigilant regarding potential major geopolitical conflicts, with 61 percent expressing concern, and 53 percent fearing a global recession.

In response to these risks, family offices are actively reshaping investment strategies by enhancing diversification through manager selection, active management, hedge funds, and investment in precious metals. Investment in developed market equities has increased, rising from 24 percent in 2023 to 26 percent in 2024, with plans to reach 29 percent in 2025. Private debt allocations are also on the rise, doubling from 2 percent in 2023 to 4 percent in 2024, with a target of 5 percent in 2025.

Conversely, cash allocations have decreased from 10 percent in 2023 to 8 percent in 2024, with further reductions planned. Additionally, investments in sectors like healthcare, electrification, and AI are receiving heightened interest. The imposition of US tariffs continues to disrupt global trade, compounded by geopolitical tensions such as the Israel-Palestine and Russia-Ukraine conflicts, further clouding the landscape for global commerce and growth.

(With inputs from agencies.)