HSBC: UHNWIs «Viewing This Pullback as an Opportunity»
Ultra-rich investors are seeing the recent market pullback as a chance to purchase certain assets at a better price, according to HSBC’s South Asia private banking head Tommy Leung.
Since peaking in February, the S&P 500 has been trending lower amid an escalating trade war under US President Donald Trump. This included some violent swings with the index dropping 12 percent before rebounding 9 percent within a matter of days in April after Trump announced seismic tariffs on the so-called Liberation Day.
«Clients are staying very close to the markets and are tracking headlines closely, especially given the sharp moves we’ve seen in recent weeks,« said Tommy Leung, head of global private banking, South Asia, HSBC in an investment note.
Investor Interest
According to Leung, such market movements have actually led to investor interest, especially from wealthier clients.
«We’ve observed that leverage levels were already low going into this selloff, which has given clients that extra buffer and staying power to ride through the volatility. Where they are seeking guidance is really around interpreting these unusual market moves, especially when even traditional safe havens such as US government bonds are selling off,» Leung commented.
«Among our UHNW clients and family offices, we’re seeing a more strategic mindset. They’re viewing this pullback as an opportunity to acquire quality strategic assets at better valuations. Some are exploring borrowing to fund acquisitions. They’ve been patient, sitting on dry powder, and now they’re selectively deploying capital.»
What Are Clients Buying?
While a small number of more leveraged clients have trimmed exposure or deleveraged, particularly from US equities, others are putting cash to work to take advantage of market dislocations.
Leung observed demand for structured investments and defensive yield generation with a common theme of rebalancing and repositioning. Hedging activities are also picking up for FX exposure in the US dollar, especially amongst UHNW clients.
«More Measured» Than Before
Compared to previous downturns, Leung noted that investor behavior this time has been «more measured».
«Many investors have applied lessons from recent years, resulting in portfolios that are more diversified across markets and sectors, with lower leverage and higher cash balances,» he said. «There’s a shift away from concentrated bets in single markets or themes. Instead, they’ve positioned for resilience.»
