Wealth managers must address safe-haven shift of wealthy Chinese investors: analyst

Over a quarter of HNWs’ wealth are parked in low-risk assets.

Wealth managers must address the overall location in safe-haven products of wealthy Chinese investors, GlobalData said.

Nearly 27% of the wealth of China’s high net worth (HNW) investors are parked in low-risk assets, the data and analytics company found.

Cash and near-cash products accounted for 26.7% of the Chinese HNW portfolio in 2024, surpassing the Asia-Pacific average of 17.8%.

“The escalation of trade war with the US driven by reciprocal tariffs poses the single most significant threat to the Chinese economy in near-term. This has had a significant impact on the Chinese investor psyche and led to an overallocation to safe-haven products,” said Poornima Chinta, banking and payments analyst, GlobalData.

This cautious stance opens the door for private wealth managers to guide clients towards undervalued investments.

“Wealth managers must directly address the greater caution in their client base with solutions and strategies that provide individuals with the confidence to invest,” Chinta said.

Only wealth managers who can anticipate market shifts and position clients ahead of the curve stand to gain significant market share in one of the world’s most dynamic wealth markets, Chinta said.

Equities have traditionally been a staple in HNW portfolios. According to GlobalData’s HNW Asset Allocation Analytics, 83% of HNW clients in China actively sought buying opportunities in volatile markets in 2024.

Robust performance of the country’s flagship index “The SSE Composite Index” in 2024 and investors’ willingness to take on risk for enhanced yields have driven allocation to this asset class.