Family offices are built to withstand uncertainty, but today’s market conditions are pushing even the most conservative strategies to evolve. From inflation to international tariffs, volatility reshapes how capital is preserved and grown.
Volatility isn’t new, but it feels different now. From trade tensions and inflation spikes to shifting geopolitical alliances, 2025 continues to test even the most seasoned investors. For family offices, whose mandate is often capital preservation and intergenerational growth, managing this uncertainty isn’t optional; it’s essential.
We spoke with Gary Selz, CIO and Co-Founder of Zero Delta Funds, to better understand how more sophisticated strategies can help family offices manage risk, protect downside, and stay resilient in unpredictable times.
The Rise of ETFs, Simple Tools for Complex Times
Exchange-Traded Funds (ETFs) have exploded in popularity, particularly among wealth managers looking for low-cost, diversified exposure with built-in downside protection. Selz highlights the rise of “buffer ETFs,” which limit potential losses in volatile markets by giving up some upside.
Buffer ETFs are a type of investment fund that use options to limit losses. They give up some gains in exchange for built-in downside protection.
Buffer ETFs are gaining traction in the U.S. among investors seeking downside protection in volatile markets. According to Selz, these structured ETFs use options to limit losses while capping gains, making them appealing to risk-averse investors. According to Reuters, assets in buffer ETFs surged to over $41 billion in 2024, up from under $10 billion just three years prior. Inflows accelerated further during periods of heightened market uncertainty, reflecting growing demand from investors focused on preserving capital, such as those nearing retirement or managing intergenerational wealth.
Why Sophistication Matters, Beyond ETFs
While ETFs may serve as a useful entry point, Selz warns that these instruments often rely on systematic, time-based strategies, which can create inefficiencies.
“The best results come from traders who are price-sensitive and understand how to value risk properly,” says Gary Selz, CIO and Co-Founder at Zero Delta Funds.
Zero Delta Funds focuses on deploying non-directional relative value volatility strategies, primarily using derivatives. Non-directional means their returns don’t depend on whether markets go up or down. Their goal is to deliver consistent, uncorrelated absolute returns.
According to Slez, their fund has produced a 30.45% total return, with a Sharpe Ratio of 1.07, meaning it delivered strong returns for the level of risk taken, and experienced smaller declines during market downturns compared to the S&P 500, a common benchmark that tracks 500 of the largest publicly traded companies in the U.S.
This kind of strategy, Selz argues, provides both risk protection and upside potential, a balance many family offices struggle to achieve with traditional tools or bank-led fund platforms.
The Problem With One-Size-Fits-All Models
Many families rely on private banks like UBS or large institutions for investment opportunities. However, Selz cautions that these platforms often focus on capital retention, not growth.
“Banks rarely take the risk of recommending smaller, niche funds,” he says. “That’s why family offices are increasingly bypassing consultants and going direct.”
The appeal is access to under-the-radar managers with deep domain expertise and real skin in the game. Zero Delta, for example, sources its managers from proprietary trading firms and hedge funds who build their own vehicles and strategies, often inaccessible through traditional channels.
Diversifying Through Real Assets, Gold and Real Estate
When market volatility increases, real assets often become more attractive to investors. Gary Selz notes that gold remains a strong diversification tool, particularly during inflation and geopolitical tension.
According to Reuters, gold prices surged past $3,200 per ounce in early 2025, driven by escalating U.S.-China trade tensions and broader global uncertainty. The rally was supported by heightened geopolitical instability, increased central bank demand, a weaker U.S. dollar, and over $21 billion in inflows to gold-backed ETF, the most significant such inflow since early 2022.
Conversely, real estate presents a more complex scenario. Many family offices are cautious about commercial real estate investments due to rising interest rates and maturing debt, making refinancing more expensive and riskier. According to Reuters, ongoing trade policy shifts and fiscal uncertainty complicate investor sentiment around real estate markets.
The Risks Behind High-Yield Alternatives
Family offices exploring alternative asset classes, from art lending to aviation finance, must also weigh the trade-off between yield and liquidity. While such strategies might offer high returns on paper, Selz warns:
“Valuation is often murky, and liquidity is limited. It’s not about chasing yield. It’s about understanding the risk underneath.”
Two Key Takeaways for Family Offices:
- Understand Before You Invest
Don’t just chase returns. Know the strategy, the risks, and the people managing your capital. - Use the Right Tools for the Right Goals
Advanced strategies can give you control and adaptability.
Market volatility isn’t going away, but family offices are better equipped than ever if they leverage the right tools and relationships. Whether through ETF structures, alternative derivatives funds, or real assets like gold, the key is understanding and clarity.
Disclaimer: The insights shared in this article are opinion-based and reflect the views of the contributors at the time of writing. Readers should consult their own advisors before making any investment decisions.
