This publication caught up with the Swiss private bank, Union Bancaire Privée, to hear about its asset allocation and approach to risk after the turbulence of the spring.

Trying to find a turning point in markets is hard, especially in volatile times, Geneva-headquartered Union Bancaire Privée says,  so it is taking a cautious investment stance by focusing on diversfication and risk management. 

From May 2023 through to February this year, UBP had a directional approach. And then Donald Trump's “Liberation Day” US tariff announcement moment on 2 April changed everything.

Among its changes, the Swiss bank is reconsidering investment opportunities in Europe but it is not rushing into it. 

Wealth managers are issuing mid-year strategy and asset allocation views. A common theme so far has been greater caution on US equities and the dollar, a shift to Europe and some emerging markets, and select moves into bond markets. In some cases, there appears even more appetite for gold – a classic safe haven move.

In mid-April, UBP decided to change its cautious stance to a more directional strategy with upside potential and protection against tail risk. In other words, the tactical overlay allocation was left to long-only and tail-risk protection (guarding against the risk of a portfolio having substantial losses due to rare, extreme events with low probability but high potential impact.) 

“It was a risk management overlay to significantly shift allocation for something more cautious,” Michaël Lok (main picture), group chief investment officer and co-CEO of asset management, UBP, told WealthBriefing in an interview at its Rue du Rhône, Geneva HQ.

Casting back to May 2023, Lok said: “We moved towards riskier assets. We decided to become more directional in our equity allocation, significantly increasing our exposure to this asset class. We decided to maintain low-duration fixed-income position and held a certain portion in hedge funds and cash. We also started building a substantial position in gold.”

In 2025, the firm realised that the decrease in global inflation would be less intense than before, but manageable. Gold, as a portfolio share, has gone up to 10 per cent, while the share of hedge funds has increased to 15 per cent. 

Trump impact
The election in November last year of Trump, and the way he permitted business tycoon Elon Musk to pursue his DOGE agenda in slashing certain government functions, made UBP more cautious. 

Market timing approaches have been “impossible,” Lok said. UBP has primarily used futures and options in the derivatives market to adjust risk exposures and make tactical shifts. “We have had to spend money to do that,” he said. UBP explains its reasoning to clients, saying it acts in this way to control exposure and risks closely.

“We want to avoid accidents for our clients,” Lok said. “We have created a cash reserve…to be able to implement rapid changes to our asset allocation.” 

Lok said that UBP’s decisions meant that it was well positioned when Trump’s administration announced a 90-day pause on tariffs, prompting a rebound in global equities.

About one week after the [tariff pause] announcement, UBP decided to abandon its tail-risk hedging strategy to maintain a long-only position.

Slower but no recession
Looking ahead, Lok thinks there will be an important slowdown but not a recession [in the US and wider world] from the uncertainties and changes to the Trump policies. 

“We must be focused on earnings guidance, and interest rates. There are some tensions. We remain vigilant and are fully invested,” Lok said. 

On other areas, Lok said UBP remains positive on the medium- and long-term case for technology.

While diplomatic in his language, Lok does not pull back from concerns about the direction of US economic and foreign policy. Trump’s policies have damaged America’s reputation in terms of both stability and its status as a haven for investment. As a result, investors are considering diversifying their portfolios across different geographies; therefore they are looking for attractive corporate opportunities elsewhere, including in Europe, Lok said.

“We were not negative on Europe but not pushing it. Now, we are recalibrating our strategy and reconsidering Europe’s position within it,” he said. 

In the past, the US market was so appealing and straightforward for investors that Europe could be somewhat overlooked, he said.