Romain Pasche: «Nobody Knows How Many More Deepseeks There Are»
Deepseek was a wake-up call for lazy clients not to neglect diversification, said Romain Pasche, who is responsible for asset allocation implementation at EFG.
While there may not be a «standard» client, certain trends are still apparent.
«AI has been a major topic for months, and our clients have been dealing with it a lot,» said Romain Pasche, EFG International's global head of investment content & delivery, in a conversation with finews.asia highlighting demand for the «Magnificent 7» (Apple, Nvidia, Microsoft, Amazon, Alphabet, Meta and Tesla).
«In some cases, clients have had an enormous concentration of assets, leading to corresponding cluster risks in their portfolios.»
Clients Behavior Quite «Sticky»
«Some time ago – months before the Deepseek episode – we started urgently advising clients to diversify more. It had also become increasingly difficult for us to analytically justify the extremely high share prices with reasonable arguments,» Pasch recalled, adding that the bank recommended switches to US small and mid caps which he considers to be reasonably valued.
Did EFG clients follow the advice and reallocate in good time?
«Clients are often quite sticky and are reluctant to realize book profits because they are hoping for more.»
AI Users Benefit from Lower Prices
While Pasche sees Chinese AI rival Deepseekas a wake-up call that reminds customers that concentration risks can also materialize, he also sees «winners and losers in this area».
If AI actually becomes much cheaper, those companies that use AI applications will benefit. Still, Pasche reiterates the continued need for diversification even in the aftermath of this AI revelation.
«[N]o one knows how many more DeepSeeks there are out there,» he added.
