The world’s wealthiest investors are listing inflation as their top risk. According to Citi Group’s latest survey, inflation this year has overtaken the trade war and tariffs to become the biggest concern for family offices, and this trend is profoundly affecting the asset allocation logic of the ultra-high-net-worth group.

Citi Group’s annual global family office report shows that after inflation, changes in interest rates and the stability of the global financial system have become the issues most concerning to the surveyed institutions.

When it comes to selecting major asset classes, publicly traded equities are ranked as the preferred asset category for future net additions. More than 90% of the surveyed family offices said their portfolios recorded positive returns this year, and nearly half said they increased their holdings of listed stocks in the first half of the year.

The allure of gold has also risen noticeably—Andy Sieg, head of Citi Wealth’s business, said that gold now appears in nearly every customer conversation he has, which is completely different from two years ago.

Citi has recently joined the ranks of vault and clearing services in the London gold market, to meet the growing demand among affluent clients for physical gold.

The above survey was conducted from June to July this year, covering 350 family offices across more than 40 countries.

Inflation concerns spread to the ultra-high-net-worth group

Inflation has replaced trade wars and tariffs as the top concern for family offices this year, reflecting the tangible impact that continuously rising costs of living and doing business are having on this group.

"People might think: if they’re so wealthy, why would they still care about these things?" Andy Sieg said in an interview:

"The reason these families are so successful is precisely because they are equally prudent about both costs and returns. Some aspects of their lifestyle have become more expensive, and they are highly sensitive to that."

According to Bloomberg Economic Research data, in the four major global economies, three have inflation rates that remain consistently above 3%, keeping interest rates at high levels and dragging down economic growth. Against this macro backdrop, both the direction of interest rates and the stability of the financial system have become core concerns for family offices, reflecting widespread market worries about structural economic pressures.

U.S. stocks emerge as the top choice for additional allocations; publicly traded markets outperform private markets

Despite rising concerns, more than 90% of surveyed family offices still achieved positive returns, and nearly half increased their allocation to listed stocks proactively in the first half of this year.

Dawn Nordberg, global head of family offices and Citi’s client solutions, said: "We see clients allocating more funds to publicly traded stocks, because U.S.-listed companies are irreplaceable when it comes to seeking growth, stability, and flexibility."

Andy Sieg further noted that publicly traded stocks have been named the top asset class for future net additions—not only because their recent performance has been steady, but also because there are concerns about valuations in the private market—particularly for assets facing regulatory actions or other uncertainties that are difficult for other investors to control. As a result, their appeal has clearly declined.

Gold’s status is reassessed; Citi expands its London vault

Inflation concerns are also accelerating the wealthy group’s reassessment of gold’s strategic value. Andy Sieg said that gold now appears in almost every conversation he has with clients, and that the situation is vastly different from two years ago. He said:

"Previously, the topic wealthy families around the world discussed was currency pairs; but now they realize that many advanced economies face similar predicaments—severe fiscal conditions, high inflation, and perhaps that, right now, the 'hard currency' may be gold."

To meet this demand, Citi is expanding its vault services capabilities. Recently, it joined a limited-size banking group to take part in vault custody and clearing services at the London gold center, serving the growing gold allocation needs of affluent clients.