Taiwan-based technology-focused single-family office Globaltec Capital has dialed down its US exposure and increased its holdings in cash-yielding assets to navigate current market volatility, according to Joe Qiao, the company’s chief investment officer.
Speaking in an interview with Asia Asset Management, Qiao notes that the company’s strategic asset allocation continues to emphasise long-term, diversified approaches that are resilient to short-term volatility and idiosyncratic risks.
However, he mentions that the company has recently implemented tactical adjustment in response to increased market uncertainties. For example, it is focusing more on managing duration risk and has increased allocation to cash-yielding assets in developed markets.
“We have also diversified part of our US exposure to mitigate single-country risk stemming from geopolitical and domestic policy uncertainties,” Qiao says. “In short, we don’t let headlines dictate our strategy, but we do make tactical adjustments when risks are evident.”
On risk management, he says the company employs both forecasts and historical data to develop its long-term capital market assumptions. “Our forecasts cover the near, medium, and long term, and include both risk/return expectations as well as correlations to provide a comprehensive view,” according to Qiao.
The company also conducts back tests to verify that its strategic asset allocation models are able to endure historical shocks. “We also evaluate potential maximum drawdowns to ensure they fall within our risk tolerance,” he adds.
