According to Christian Nolting, chief investment officer at Deutsche Bank AG’s wealth management unit, rich investors are shunning equities because of concerns about the political impact from Donald Trump’s administration and Brexit.

“People are still cautious; there is still demand for bonds and people are not ready to move into the more risky equity space,” Nolting said in an interview in Dubai. The perception “is that there are a lot of risks out there and a lot of uncertainty.”

Britain’s vote to leave the European Union and the election of Trump as U.S. president are just two of the unexpected events that markets have been reeling from. The uncertainty has been enhanced with populist candidates in the Netherlands, France and Germany who are stoking fears of a breakup of the European Union. And due to how European elections may impact markets, the multiasset funds of the Deutsche Asset Management have been cut to the lowest on record.

Nolting said that as investors keep cash on the sidelines or in bonds, currencies are now one of the most important assets. “We don’t expect a massive shift from bonds into equities as equities still represent a different risk profile,” he said. According to the CIO, shares are not cheap and yet some larger clients will buy stocks if they are hedged.

Financial market observers have been split by the so-called great rotation – the expectations of a massive shift from bonds into equities. While Citigroup and Goldman Sachs analysts have questioned whether the trend is sustainable or even exists at all, Charles Schwab Corp.’s chief global strategist Jeffrey Kleintop has said the trend has years to run.

Credit Suisse Group AG Chief Executive Officer Tidjane Thiam said this week that political uncertainty will continue to affect markets this year. He said that clients at the bank’s wealth management unit are looking to take “downside protection” against a fall in global markets and were holding higher cash balances late last year.

“We’re going to see a lot of volatility,” he said in an interview with Bloomberg Television. “I, like many people, worry that there’s too much comfort right now and maybe some uncertainties are under-estimated, particularly political ones, and as we get closer to some of those moments you’re likely to see spikes in volatility.”

Nolting said that the U.S. market would be helped by new infrastructure spending and lower the corporate tax rate which the Trump administration is likely to pursue in the near future.  He said that as the policies reduce the probability of a recession in the next three years, that’s likely to make corporate bonds more attractive.

Nolting said that compared to those from Latin America due to the better political climate in the region, Deutsche Bank Wealth Management favors emerging-market dollar bonds and prefers Asian investment-grade notes.

He said that investors getting confident about Europe would take some time. “I wouldn’t expect people to see the outcome of say, the French elections, and then go massively in,” Nolting said. “It will take some time for investors to get used to this new environment.”

(Adapted from Bloomberg)

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