Grant Pan, CFO of Noah Holdings and CEO of ARK Wealth Hong Kong

As global economic cycles converge and the wealth management landscape shifts, the focus of global Chinese investors, especially that of high-net-wealth individuals ( HNWIs ), is moving beyond returns to prioritizing wealth preservation and resilience.

The era of passive, return-driven investing is being replaced by a more strategic, value-driven approach. Wealth managers are adapting their strategies to help clients navigate these challenges, emphasizing the importance of structured asset allocation.

Investors are seeking ways to diversify, preserve wealth and adapt to heightened market volatility, finds Chinese investor-focused ARK Wealth Management – the global wealth management platform of Chinese wealth management firm Noah Holdings – in its recently issued H1 2025 CIO Report.

“The report emphasized the importance of strategic asset allocation at critical moments,” adds Grant Pan, CFO of Noah Holdings and CEO of ARK Wealth Hong Kong.

China offshore asset allocation demand has seen a significant rise in 2024, with the total of Qualified Domestic Institutional Investor ( QDII ) fund assets under management ( AUM ) having grown by a remarkable 46.6% year-on-year as of the end of 2024.

And public QDII mutual funds, according to the Asset Management Association of China, have seen a 40% increase in AUM over the same period. These surges reflect a strong demand for global diversification, as Chinese investors increasingly seek international exposure amid domestic economic uncertainties.

The demand for geographic diversification is also influenced by geopolitical and economic volatility, such as trade tensions and diverging monetary policies between major economies like the US and China.

A shift from isolated investment decisions towards a more structured approach may help investors address the importance of resilience and long-term planning. This shift involves focusing not only on maximizing returns, but also on building a stable and adaptable portfolio that can withstand economic shocks.

“Clients are increasingly focused on risk awareness in their investment behaviour, with risk buffers and inheritance planning becoming focal points,” Pan states. “They are becoming more risk-aware, [and] no longer simply pursuing single-point alpha, but instead are focusing on optimizing overall asset allocation.”

In addition to offshore asset allocation, prioritizing government bonds, the ARK report notes, is another important trend. The increasing demand for government bonds reflects a broader shift in Chinese investor risk appetite, as they prioritize wealth preservation amid global economic uncertainties.

Another significant development in the Chinese financial market is the rising interest in insurance products, which serve as a critical tool for wealth protection and transfer. Insurance has become an essential component of wealth management strategies, particularly for those focused on long-term financial security and intergenerational wealth transfer.

“Intergenerational wealth transfer is entering the discussion stage,” Pan points out. “And it will peak in the next five to 10 years. Clients are conducting various studies and preparations on core topics such as insurance, tax and family trust structures.”

Trust structures and global life insurance, he also notes, play important roles in wealth transfer solutions, especially for cross-border families.

Another notable trend in wealth management is the growing influence of artificial intelligence ( AI ). “AI is reshaping the wealth management industry,” Pan shares, “both as an investment opportunity and as a tool for portfolio optimization.”

AI’s potential to reshape the industry is highlighted in the ARK Wealth CIO Report, which emphasizes the importance of distinguishing sustainable investment opportunities from speculative ones in the rapidly advancing AI sector.

“Technology assets, particularly in the AI industry, have become a hot spot for client interest,” Pan states. “US AI-concept companies and DeepSeek-concept stocks in China continue to be favoured.”

HNWIs, Pan adds, may have knowledge and interest in other markets, such as Southeast Asia and India, but their allocations are still mainly focused on China and the US.

“China and the US, as the first-tier countries, are far ahead of the second-tier in terms of technology development,” Pan stresses, “and client allocations are mainly focused on China and the US.”

Despite the growing enthusiasm, Pan cautions investors to view these assets rationally, as “AI-related assets have not yet shown irrationally high valuations.”