Future-proofing wealth: portfolio strategies for resilience in uncertain markets

Markets are approaching a critical juncture, with global investors closely evaluating the potential consequences of rising geopolitical tensions and renewed trade tariffs. Meanwhile, the narrative of US economic exceptionalism is losing steam.

In the August 2025 edition of The Business Times’ Who’s Who in Private Banking, executives from leading wealth managers in the region, including Jack Siu, Lombard Odier’s Head of Discretionary Portfolio Management, Asia, gave their thoughts on the market outlook, where investment opportunities are emerging, and how investors can mitigate risk and ensure their portfolios remain resilient and robust.

Delve into Jack’s commentary below, in excerpts from an article published in The Business Times on 27 August 2025.

Q1: Recent developments, including tariffs and US dollar weakness, have upended the traditional investment playbook. How do you discern between noise and fundamental shifts? Which developments do you consider fundamental with longer-term implications?

Our portfolios are governed by our Lombard Odier house view, which is driven by rigorous research and market analysis, and formalised by our investment committee’s decision process that combines our global insights with deep local expertise.

Within this framework, we discern what could be just noise and the probability and scenarios of it becoming real fundamental shifts. We then assess the market implications of the potential outcomes and make risk-adjusted investment decisions that have helped us to generate consistently strong absolute performance in our portfolios.

The current global landscape is characterised by a shift towards a multipolar world, gradually replacing the unipolar, globalised order of the past three decades.

Key developments include ongoing strategic competition between the US and China, alongside rising protectionism across sectors such as technology, defence, industrial production and trade.

These dynamics coexist with multilateral institutions, regional blocs such as the European Union, Asean, and Brics+, shaping a more complex geopolitical fabric.

Our portfolios are governed by our Lombard Odier house view, which is driven by rigorous research and market analysis, and formalised by our investment committee’s decision process that combines our global insights with deep local expertise

At the same time, broader global trends – demographics, technological innovation, and the urgent transition towards a more sustainable and equitable economy – are driving transformative opportunities.

Within this complex backdrop, several developments stand out as particularly consequential with long-term implications.

One, China aims to position itself as a leader in green technologies and renewable energy, which could reshape global supply chains and investment flows despite facing significant challenges.

Two, while the US consumer remains central today, the emerging markets’ consumers are poised to drive future growth, reflecting shifts in global economic power and consumption patterns.

Three, advancements in AI and increasing capital expenditure on infrastructure are fuelling a new wave of innovation and productivity gains, with potential long-term impacts on multiple sectors.

As asset allocators, we recognise that these shifts could fundamentally alter the global economy and financial markets over the coming decades. They underscore the importance of maintaining a diversified portfolio that can navigate evolving risk-return landscapes, and capture opportunities while managing uncertainties inherent in these transformative trends.

Through discretionary portfolio management services, our clients benefit from our round-the-clock analysis of these complex developments on their behalf.

A robust portfolio is designed to be stable, resilient, and capable of generating steady returns over the long term, even in challenging economic environments, adaptable to market cycle and regime changes. Every year, we spend at least a quarter of our time in generating our capital market assumptions (or expected asset class returns and risks over the long term), and strategic asset allocations across currency and risk profiles to ensure we get the balance between risk and return right for our clients

Read more about investment strategies from John Woods, our Asia CIO here.

Q2: What does a robust portfolio mean? What instruments/vehicles are most essential in mitigating risk and still ensuring upside?

A robust portfolio is designed to be stable, resilient, and capable of generating steady returns over the long term, even in challenging economic environments, adaptable to market cycle and regime changes. Every year, we spend at least a quarter of our time in generating our capital market assumptions (or expected asset class returns and risks over the long term), and strategic asset allocations across currency and risk profiles to ensure we get the balance between risk and return right for our clients.

A portfolio’s construction should mitigate downside risks while positioning it for potential upside. Implementation is crucial – pairing certain investment instruments and vehicles with others. These typically seek to balance wealth preservation and growth potential, allowing investors to shield their capital while participating in market gains.

Some of the most important building blocks include a combination of diversified ETFs, mutual funds, equities, bonds. Some hedging instruments, hedge funds and private assets, complemented by cash reserves and commodities, form a core set of tools for mitigating risk while participating in potential upside. For assets that have an often-illiquid nature, however, they are only suitable for investors ready to take a long-term approach.

Read the full article here.

Source: The Business Times © SPH Media Limited. Permission required for reproduction