ETMarkets NRI Talk: Stefan Hofer on why gold, euros & private markets may be NRI wealth shields

As planetary markets grapple with escalating commercialized tensions and argumentation unpredictability, Non-Resident Indians (NRIs) are progressively looking for ways to safeguard their wealthiness from rising volatility.

In this variation of ETMarkets NRI Talk, Stefan Hofer, Chief Investment Strategist astatine LGT Private Banking Asia Pacific, outlines wherefore accepted bets connected the US dollar and equities whitethorn nary longer connection the aforesaid information net.

Instead, helium highlights the strategical worth of gold, the euro, and backstage markets arsenic much resilient components of a globally diversified portfolio—especially successful a satellite drifting toward multipolarity. Edited Excerpts –

Q) How mightiness escalating commercialized tensions betwixt large economies similar the US and China impact the planetary concern scenery for NRIs?

A) With little than 1 period having passed since the motorboat of the caller US tariff regime, investors bash not person hard economical information connected manus to gauge the expected resistance connected spending.

Sentiment surveys person been published, and these are uniformly negative, arsenic good arsenic expectations of ostentation which person moved higher.

The different large caller improvement is the wide weakening of the US dollar, successful enactment with the alleged aims of the Trump Administration.

Q) In the aftermath of a tariff war, should NRIs see reallocating portion of their portfolio from planetary equities to safer fixed-income instruments oregon gold?

A) We advocator globally diversified portfolios arsenic we unreserved towards a much multi-polar world. In presumption of peculiar regions extracurricular India, European assets and the Euro basal retired a being imaginable longer-term beneficiaries arsenic US exceptionalism fades.

Gold – adjacent astatine existent elevated levels – whitethorn beryllium utile arsenic a hedge against rising US ostentation expectations.

For fixed income, we urge predominantly precocious recognition ratings and shorter duration instruments, fixed the highly uncertain rates outlook for the US Federal Reserve.

Q) What benignant of geographical diversification strategies should NRIs follow to hedge against the volatility caused by commercialized wars?
A) In summation to diversifying distant from US equity vulnerability and the US dollar successful general, much antiaircraft strategies that little the beta of an wide portfolio would marque consciousness successful the existent environment.

This means considering market-neutral strategies and/or backstage marketplace solutions, beryllium it successful backstage equity oregon credit.

Q) Could India payment arsenic a manufacturing alternate amid US-China commercialized tensions, and however tin NRIs capitalize connected this shift?
A) India is successful rod presumption to grow its marketplace stock successful planetary manufacturing exports, and anecdotal grounds (Apple assembling iPhones successful India) suggests that important advancement is being made successful this area.

Over the longer term, for India to beryllium connected the cutting borderline of manufacturing exports, past a further ramping up of logistics infrastructure is needed, namely seaports, highways, obstruction and airports, for example.

Q) Are wealthiness managers recommending immoderate circumstantial plus classes oregon geographies arsenic a hedge against trade-related planetary marketplace turbulence?
A) The policy-making situation is precise volatile, and this is being expressed successful plus prices astir the world.

A well-diversified portfolio crossed geographies and currencies should assistance investors navigate the existent turbulence.

Hedging strategies that support the downside of a portfolio request to beryllium cautiously assessed from a cost-benefit perspective, arsenic hedging costs tin alteration quickly.

(Disclaimer: Recommendations, suggestions, views, and opinions fixed by experts are their own. These bash not correspond the views of the Economic Times)