The results of the latest annual survey on what people think and how they behave family management offices from Citi (2024 Family Office Survey) have only served to justify why central bank meetings have recently become one of the catalysts that most move the market. And the decisions of these banking entities already concern this type of client of the American firm more than geopolitical issues, such as relations between the United States and China and the conflict in the Middle East, which occupy a lower position on the list of concerns.
“For the first time since 2021, inflation is not the main short-term concern of respondents regarding the economy and financial markets. Instead, the outlook for interest rates comes first for more than half of respondents, followed by US-China relations and overvaluation of markets,” explains the entity, from which it is also highlighted that concern about the conflict in the Middle East is now greater than that caused by the war between Russia and Ukraine.
The survey offers insight into what these types of investors, tasked with managing the assets of a single wealthy family group, are thinking and behaving, and also reflects the interest they have shown in shifting their investments from cash to fixed income, whether public or private.
It is also worth noting the greater optimism about the profitability they expect to obtain from their investments over the next year. And that’s it, Respondents were almost unanimous (97%) in their expectations of positive returns, with almost half predicting returns of more than 10%.
“Over the past two years, we have seen the number of respondents grow from 126 to 338 globally, indicating an increased need for exclusive insights into the key challenges and opportunities facing family offices today,” comments Hannes Hofmann, Head of the Global Family Office Group at Citi Private Bank.
North America receives the largest global weighted allocation (60%), followed by Europe (16%) and Asia Pacific excluding China (12%).
The report also reveals changes in portfolio allocations made by these types of clients. Stocks and bonds increased their weighting from 22% to 28% and from 16% to 18%respectively. North America receives the largest global weighted allocation (60%), followed by Europe (16%) and Asia Pacific excluding China (12%).
In this sense, it is worth noting that allocations to China have been reduced by almost half since last year, from 8% to 5%, due to the “country’s continuing economic challenges and market concerns.” For their part, “the proportion of allocations to North America has increased from 57%, driven by the strength of the equity market,” they indicate.
