How to build a geopolitical risk-proof portfolio? UBS recommends 3 strategies

1. Diversification: Spread your investments across different asset classes, regions and sectors to effectively manage short-term risks while increasing long-term wealth. Diversification helps minimize the impact of geopolitical shocks on your portfolio.

2. Hedge Funds: Consider investing in hedge funds that can benefit from tactical market fluctuations and generate profits (alpha) within strict risk limits. Hedge funds often employ strategies that can protect against losses during uncertain times.

3. Hedging with commodities and currencies: Use gold, oil and the Swiss franc as portfolio hedges. These assets can provide stability during escalating geopolitical tensions. UBS expects the price of gold to rise to USD 2,600 per ounce and the price of oil to reach USD 87 per barrel, making these commodities attractive hedging instruments. The Swiss franc, known as a safe haven currency, has the potential to strengthen further.