Check out how APAC family offices moved their investments in Q2

There was “moderate” client interest in longer-dated US Treasuries and perpetual bonds.

Family offices in Asia Pacific put more of their cash to work in the second quarter, registering the lowest cash allocations of any region globally, according to Citi Private Bank’s latest report on family offices.

On an equal-weighted basis, allocations to cash fell to 24.4%, a 1.1 percentage point (ppt) fall, the bank found. 

Fixed income weightings increased to 23.5%, 1.76 ppt higher than the previous quarter, with family offices focusing on quality, Citi Private Bank noted. Net dollar inflow was across all sub-asset classes within fixed income. 

Buy trades for developed assets contributed most of the overall positive net dollar inflow within fixed income, with buy trades approximately 2.5 times more numerous than sells.

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“The bulk of trading in both directions centered on financial credits. We also observed moderate client interest in longer-dated US Treasuries and perpetual bonds, where our Global Investment Committee remains tactically overweight,” the report said, adding taht there was buying interest in a short-duration bond strategy and a long-duration US investment grade strategy.

Equities, meanwhile, experienced a net dollar outflow during the second quarter, with the equal-weighted average allocation falling 0.7 ppt to 40%. 

The largest contributor to the net dollar outflow was holdings of emerging market equities, where sell trades were almost double those of buys. Total buying and selling activities were broadly distributed across sectors.