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

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

Time of India05-05-2025

As global markets grapple with escalating trade tensions and policy unpredictability, Non-Resident Indians (NRIs) are increasingly looking for ways to safeguard their wealth from rising volatility.
In this edition of ETMarkets NRI Talk, Stefan Hofer, Chief Investment Strategist at LGT Private Banking Asia Pacific, outlines why traditional bets on the US dollar and equities may no longer offer the same safety net.
Instead, he highlights the strategic value of gold, the euro, and private markets as more resilient components of a globally diversified portfolio—especially in a world drifting toward multipolarity. Edited Excerpts –
Q) How might escalating trade tensions between major economies like the US and China affect the global investment landscape for NRIs?
A) With less than one month having passed since the launch of the new US tariff regime, investors do not have hard economic data on hand to gauge the expected drag on spending.
Sentiment surveys have been published, and these are uniformly negative, as well as expectations of inflation which have moved higher.
The other major new phenomenon is the broad weakening of the US dollar, in line with the alleged aims of the Trump Administration.
Q) In the wake of a tariff war, should NRIs consider reallocating part of their portfolio from global equities to safer fixed-income instruments or gold?
A) We advocate globally diversified portfolios as we rush towards a more multi-polar world. In terms of particular regions outside India, European assets and the Euro stand out a being potential longer-term beneficiaries as US exceptionalism fades.
Gold – even at current elevated levels – may be useful as a hedge against rising US inflation expectations.
For fixed income, we recommend predominantly high credit ratings and shorter duration instruments, given the highly uncertain rates outlook for the US Federal Reserve.
Q) What kind of
geographical diversification
strategies should NRIs adopt to hedge against the volatility caused by trade wars?
A) In addition to diversifying away from US equity exposure and the US dollar in general, more defensive strategies that lower the beta of an overall portfolio would make sense in the current environment.
This means considering market-neutral strategies and/or private market solutions, be it in private equity or credit.
Q) Could India benefit as a manufacturing alternative amid US-China trade tensions, and how can NRIs capitalize on this shift?
A) India is in pole position to expand its market share in global manufacturing exports, and anecdotal evidence (Apple assembling iPhones in India) suggests that important progress is being made in this area.
Over the longer term, for India to be on the cutting edge of manufacturing exports, then a further ramping up of logistics infrastructure is needed, namely seaports, highways, rail and airports, for example.
Q) Are wealth managers recommending any specific asset classes or geographies as a hedge against trade-related global market turbulence?
A) The policy-making environment is very volatile, and this is being expressed in asset prices around the world.
A well-diversified portfolio across geographies and currencies should help investors navigate the current turbulence.
Hedging strategies that protect the downside of a portfolio need to be carefully assessed from a cost-benefit perspective, as hedging costs can change quickly.

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

China, Hong Kong stocks fall as initial Sino-US trade optimism wanes
China, Hong Kong stocks fall as initial Sino-US trade optimism wanes

Economic Times

time32 minutes ago

  • Economic Times

China, Hong Kong stocks fall as initial Sino-US trade optimism wanes

Stocks in China and Hong Kong traded lower on Thursday, led by declines in the tech sector, as markets struggled to sustain the positive momentum from the Sino-U.S. trade talks that lacked concrete details. ADVERTISEMENT China's blue-chip CSI 300 Index closed about 0.1% lower after wavering through the day, slipping from the three-week high touched on Wednesday. Hong Kong's Hang Seng index lost 1.4% at close to pull back from the nearly three-month high hit in the previous session. Tech shares led losses in onshore and offshore markets. The CSI Semiconductor Index shed 1.5%, while the Hang Seng Tech Index dropped 2.2%. Among major losers, chipmaker SMIC fell 2% to a one-week low. Alibaba weakened 3.2% and EV-maker Xpeng slid 6.7%. The CSI Rare Earth Index closed flat after slipping nearly 1% in the morning session and continued to hover near its seven-month high. ADVERTISEMENT A trade truce between the world's two biggest economies was back on track, U.S President Donald Trump said, a day after negotiators from Washington and Beijing agreed on a framework to ease bilateral retaliatory tariffs. Under the agreement, Beijing will lift export curbs on rare earth minerals and the U.S. will restore Chinese students' access to its universities, Trump said on Truth Social. ADVERTISEMENT Yet the terms remain subject to final approvals, with details notably absent. The 55% tariffs on Chinese imports will also stay, U.S. Commerce Secretary Howard Lutnick said. "We still don't know if what Trump says will actually happen. It's disappointing that the tariffs rates were not dialled down at all and tech curbs on China were not even mentioned," said Jason Chan, senior investment strategist at Bank of East Asia, Hong Kong. ADVERTISEMENT The talks left key issues, like chip exports, unaddressed, leaving room for conflicts in the future, and no one knows for how long the current truce will last, he added. Chinese markets have been struggling to recover from trade shocks for the past two months after Trump announced sweeping tariffs on April 2 that threatened the global trade system. ADVERTISEMENT The CSI 300 Index has barely eked out any gains since then, while the Hang Seng Index has climbed 3.5%, but the two are underperforming the nearly 10% bounce in the MSCI World Index . The market is less sensitive to trade talks and investors are shifting focus to economic fundamentals, Wang Zhuo, partner at Zhuozhu Investment, said. "The key for China now is to bolster manufacturers' confidence and break the deflationary trend." (You can now subscribe to our ETMarkets WhatsApp channel)

Govt again defers quality control orders for cement and mail sacks—to 6 Sept
Govt again defers quality control orders for cement and mail sacks—to 6 Sept

Mint

time37 minutes ago

  • Mint

Govt again defers quality control orders for cement and mail sacks—to 6 Sept

New Delhi: The Union government has deferred by three months the rollout of mandatory quality control orders (QCOs) for polymer-based sacks used in cement packaging and mail distribution to avoid supply disruptions. The new implementation date for the QCOs will be 6 September, the Department for Promotion of Industry and Internal Trade (DPIIT) said in three separate notices late Wednesday. The department had earlier extended the deadline to 6 June 2025 from the original date of 3 July 2024, which was set when the rules were first issued in 2023. Manufacturers of polymer sacks say they haven't been able to make the switch because of a combination of cost and compliance burden. The revised timeline applies to three categories of products: Plastic-woven sacks made from polyethylene and polypropylene used for 50 kg cement bags, Laminated block-bottom valve sacks used in cement packaging, and Laminated plastic sacks used for sorting, transporting, and storing mail and parcels. Also read | Non-tariff barrier: Time for India to reverse its rash of quality control orders Cement companies commonly use plastic-based sacks to package 50 kg bags, which are the industry standard. These sacks are preferred over traditional materials due to their strength, durability, and resistance to moisture. Similarly, the sacks used by postal and courier services play a crucial role in ensuring safe transport and delivery of mail and parcels. The quality control orders were tightened to ensure the bags used by the Postal Department for loading parcels are of good quality. Besides, ensuring the quality of these sacks is key to preventing breakage, reducing losses, and improving efficiency. While DPIIT's notices do not detail the reasons for the extension, a senior government official said the decision followed industry requests for more time to complete testing procedures, obtain Bureau of Indian Standards (BIS) certification, and upgrade infrastructure in line with the mandated quality standards. 'These are highly used products in critical sectors such as construction and logistics. The extension will help manufacturers align with quality benchmarks without disrupting ongoing operations,' the official said, requesting anonymity. Under the Bureau of Indian Standards Act, 2016, the Centre is empowered to enforce mandatory BIS certification in public interest. Once in force, quality control orders prohibit manufacturing, sale or import of non-BIS-certified products in the covered categories. Industry associations have welcomed the decision to defer the enforcement date for the polymer sacks, calling it a 'practical move' that will help micro, small, and medium enterprises (MSMEs) meet the requirements without facing punitive action or production halts. 'Since a significant number of MSMEs are involved in making these sacks, the move will help them meet the required standards and get certified by BIS,' said Vinod Kumar, president, India SME Forum. 'Bags made from poly material last longer, but they are not biodegradable. Meeting BIS standards means manufacturers will have to switch to more environment-friendly and biodegradable materials, which increases the costs and requires major changes in production process,' said a Delhi-based manufacturer of plastic bags, asking not to be named. The global cement packaging market size is projected to grow to $13.68 billion this year from $13.20 billion in 2024 and expected to reach $18.31 billion by 2032, expanding at a compound annual growth rate (CAGR) of 4.26% during the forecast period, as per Fortune Business Insights, an online market research platform.

Iran Warns of Retaliation to UN Watchdog's Nuclear Censure
Iran Warns of Retaliation to UN Watchdog's Nuclear Censure

Mint

time39 minutes ago

  • Mint

Iran Warns of Retaliation to UN Watchdog's Nuclear Censure

(Bloomberg) -- Iran warned it will retaliate following a decision by the United Nations atomic watchdog to censure the Islamic Republic over its nuclear program, deepening a crisis that's also drawn in the US and Israel. The International Atomic Energy Agency's board of governors approved a resolution in Vienna on Thursday that deemed Iran in non-compliance of its international obligations, setting up a potential referral to the UN Security Council for a renewal of sanctions. Iran will 'consider appropriate responses, including initiating the process of withdrawing from the Treaty on the Non-Proliferation of Nuclear Weapons,' Iran's ambassador to UN, Saeid Iravani, said ahead of the vote, according to the state-run IRNA news agency. The breakdown in nuclear diplomacy comes alongside a corresponding rise in regional tensions. The US ordered some staff to depart its embassy in Baghdad and authorized families of military service members to leave the region, officials said, while US President Donald Trump said he's growing less confident about the prospects for a successful deal to impose new limits on Iran's nuclear program. Iran warned it could hit US military assets in the Middle East if the talks collapse and the Islamic Republic is attacked. Oil prices rose the most since October on the mounting tensions, before paring gains on Thursday. Negotiations between Iran and the Trump administration have stalled over whether or not Tehran's engineers will retain their right to enrich uranium. The US and Israel have publicly insisted Iran can't possess that key technology — critical for producing the fuel needed for nuclear reactors and bombs. 'A comprehensive deal is likely contingent on the US allowing Iran to retain some domestic enrichment capacity,' analysts at the Eurasia Group wrote in a note this week. Iran has previously offered to end its ramp up of highly-enriched uranium in exchange for sanctions relief, after producing a record volume over the last quarter. That material could quickly be turned into the fuel for the equivalent of 10 bombs, should Iran's leadership take the political decision pursue weapons. The IAEA's vote was highly divided, with 19 in favor — led by the US and European nations — and three against, including China and Russia. There were 11 abstentions. Russian diplomats, who have been asked by the Trump administration to facilitate a diplomatic solution with Iran, cautioned that passing the IAEA vote of censure carries significant risks. 'The adoption of the presented resolution will significantly reduce the chances' of a diplomatic resolution, wrote Moscow's IAEA envoy Mikhail Ulyanov in a statement. Instead, 'such an escalation will have the most negative consequences both for the IAEA and for the entire non-proliferation regime.' More stories like this are available on

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store