UBS found that 65% of family offices expect confidence in the dollar’s reserve role to weaken. Nearly half, 47%, also believe they are overexposed to the dollar. Likewise, Julius Baer describes currency movements as one of the defining features affecting their Lifestyle Index.
A currency rebalancing is underway. What does this mean for a globally diversified portfolio?
A Change in Attitude Towards the Dollar
When asked why they are reassessing their dollar exposure, family offices consistently pointed to several underlying concerns:
The Potential Debt Crisis
Moody’s downgraded the United States Government last year, noting high levels of government debt and interest payment ratios. Since then, total debt levels have only continued to rise.
Family offices are well aware and cite the crisis as a material risk. Rising debt can have fallout impact: reductions in foreign demand for U.S. Treasuries, upward pressure on bond yields, elevated borrowing costs, and weight on the relative attractiveness of risk assets. It’s prompting investors to reconsider the dollar’s role.
Concentration Risk
As of May, the concentration of the top ten stocks in the S&P 500 sits at 40.8%, well above the 26.6% peak seen at the height of the dot-com bubble. In addition, outside of large-cap technology and the AI investment cycle, market performance has been comparatively subdued.
Family Offices are diversifying around that concentration, with many still naming artificial intelligence as a compelling long-term investment theme, just across the entire value chain. It is not necessarily a rejection of American growth; it does look like a rejection of single-currency, single-index exposure to it.
Hedging Strategies
Norway’s Government Pension Fund Global sold dollar-denominated bonds this past year, just to buy back renewable-energy infrastructure with Brookfield Management. The reason for the move? Brookfield CEO Connor Teskey observed, “Real assets provide diversification and stability in a volatile market.”
Family offices are taking similar steps. According to UBS, currency hedging ranks among the most common strategies for managing currency risk, while reducing U.S. dollar exposure ranks even higher. The data suggest that investors are seeking greater resilience and using other currencies to achieve it.
Local Price Dynamics
For globally mobile investors, currency risk extends beyond portfolio performance. Purchasing power depends on local conditions, making exchange rates a central lifestyle condition rather than a background variable.
That is obvious enough, but Julius Baer found that much of the past year’s lifestyle inflation had less to do with higher prices and more with relative currency movements. As wealth becomes more internationally mobile, multicurrency frameworks move from convenience to operational necessity.
Stability
When asked why investors are reassessing the U.S. dollar, Citi Wealth’s Global Head of Client Solutions, Darlene Patterson, noted that clients are “somewhat concerned about policy risk in the United States.” She added that the importance of a “stable, consistent political environment” should not be underestimated.
Family offices appear to share that perspective. Geopolitical risk ranked as their leading short- and long-term concern, reinforcing the case for broader currency diversification.
Regional Diversification
Nearly two-thirds of family offices now hold bankable assets across at least three jurisdictions, while almost one-third operate across four or more. What’s more, much of the spread is multishoring, physically adding to the family office’s own operations and staff across multiple regions. The objective is to avoid any single point of failure (regulatory, bank system, market environment, etc), and that creates a natural need for multi-currency management. Geographic diversification increasingly demands currency diversification.
Strategy, Not Departure
The attitudes expressed above by family offices do not show a full exodus. Tellingly, Americans actually raised their home-country allocation from 86% to 88%. Also, the dollar still accounts for 57% of global foreign exchange reserves, ahead of the euro (20%). Does another currency currently possess the liquidity, institutional credibility, and convertibility required to displace it?
The implication: today’s currency adjustments reflect more prudent risk management than a vote against the dollar.
Key Takeaway
As risks become more dispersed, family offices are spreading exposure across jurisdictions, currencies, and asset classes while remaining selective about where they pursue growth.
This may look like a currency story. In reality, it is a story about trust. What’s changed is the belief that any single jurisdiction represents concentrated, uninsurable risk to a multi-generational fortune: policy risk, banking-access risk, and geopolitical risk to daily life. Currency diversification is simply a visible expression of that shift.
For advisors, this change in attitude raises expectations. Managing global wealth increasingly requires infrastructure capable of supporting multiple jurisdictions, currencies, banking relationships, and regulatory environments without creating unnecessary operational complexity.
That is where Invess comes in. We partner with advisors who have earned the trust of their clients but need institutional-grade support to execute increasingly global wealth strategies. If your clients’ ambitions have become international, your infrastructure should be as well.