What rich investors are doing
by June 17, 2009 5:42 pm 78 views
What are the rich folks around the world doing with their extra coin? Most of them are keeping it out of the equity markets, according to a the recent Barclays Wealth Survey.
“For now, wealthy investors surveyed indicate they have little inclination to take on any added risk, even when they recognize that significant investment opportunities may exist in the current environment,” Barclays noted in its statement.
The company polled 2,100 “high net-worth individuals globally” in April and May, with 68% saying the risk of further drops in asset prices is too high to take advantage of investment opportunities. The survey also suggests the wealthy investors favor real estate, government bonds and cash in this time of uncertainty.
“The challenges presented by this economic upheaval have left many wealthy investors in untested, thorny territory,” Aaron Gurwitz, head of global investment strategy for Barclays Wealth, noted in the report.
Other survey findings include:
• 88% of wealthy investors surveyed said opportunities exist in the current market.
• 68% of these wealthy investors (UAE, 71%; India, 69%; U.S., 63%; UK, 55%) may be shying away from market opportunities because they believe the risk of further price falls is too high.
• Of those surveyed, UK investors (37%) are most likely to increase the level of risk in their portfolios, followed by individuals in the UAE (36%) and Hong Kong (33%). Investors in Spain and India (13% and 16%, respectively) are the least likely to assume more risk.
• The intent to allocate to domestic stock was highest in the U.S. and the UK (30% and 21%, respectively) while investors in Spain (5%) and Hong Kong (10%) are among the least likely to favor this asset class.
• Quality and transparency of information from an investment provider is taking on increased importance (35% in the year ahead vs. 25% a year ago)
• “The financial and economic crisis has had a considerable effect on the framework within which high net-worth investors view their investments,” Gurwitz noted. “The time horizon for assessing performance has been dramatically shortened, and concerns about liquidity, transparency and what they’re actually investing in have become much more important.”