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Global wealthy investors cautious on 2020

2019-11-13 06:22

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NEW YORK, Nov. 12 (Xinhua) -- High net worth individual investors around the world looked to 2020 with much caution amid deepening geopolitical concerns, yet they remained upbeat on the economic and market outlook for the decade ahead, according to a new investor survey by leading Swiss financial institution UBS.

The survey, released on Tuesday, had polled over 3,400 wealthy investors globally with a minimum net worth of 1 million U.S. dollars and was conducted by UBS Global Wealth Management between August and October.


Almost eight in ten, or 79 percent, respondents held that markets are moving towards a period of higher volatility, and 66 percent believed that markets are now driven more by geopolitical events than business fundamentals such as profitability, revenue and growth potential.

"Business fundamentals that once were the backbone of how investors think about the market are now being usurped by a confusing geopolitical landscape," said the survey, adding that investors have become less likely to act as a consequence.

The survey found that the biggest three geopolitical factors that rattle investors are U.S.-China trade tensions, domestic politics and the 2020 U.S. presidential election.

Globally, 44 percent of investors remained anxious that trade frictions would impact their portfolio performance next year, which has triggered the most concern among the top three threats.

Yet, investors in China's mainland appear to be the least worried about trade conflict. Only 30 percent of the participants in the mainland cited trade worries. In contrast, a greater portion, or 45 percent, of U.S. respondents expressed angst over trade.

Investors "see global interconnectivity and reverberations of change impacting their portfolios more than traditional business fundamentals, a marked change from the past," said Paula Polito, client strategy officer at UBS Global Wealth Management, in a statement on Tuesday.

Regionally speaking, investors in Latin America were more cautious in the near term than in any other major regions. Among them, 81 percent saw markets approaching greater volatility, and 64 percent were concerned about U.S.-China trade conflict.

Asian investors were less apprehensive about shorter-term market dynamics than other geography surveyed, with 76 percent believing a more volatile path for markets in store and 40 percent disturbed by trade fights.

As challenges have heightened, investors are seeking various strategies to protect their portfolios, with 64 percent considering adding high quality stocks, which attracted the most attention.

In comparison, 62 percent will build up diversification across asset classes, and 60 percent plan to increase cash in their portfolios.


Despite rising short-term anxieties, the majority of the respondents voiced optimism over the next decade, as 69 percent of them felt upbeat on investment returns in the 2020s and 88 percent showed interest in aligning their portfolios with a number of "mega-trends."

The aging population is the most identified such anticipated trend, as mentioned by 87 percent of the survey participants. Other trends include advanced technology such as automation and artificial intelligence, as well as diminishing natural resources.

Among the respondents, 82 percent also expressed great interest in sustainable investing, which is driven by a series of issues investors believe are the most important for the world to address in the next decade.

Those issues contain clean water and sanitation, access to good health care, as well as pollution and environmental destruction.

More notably, investors in the 18-34 demographic outnumbered other age groups to have expressed bullish sentiment for long-term and sustainable investing.

Of the young generation, 84 percent were highly interested in aligning their portfolios with mega-trends, and 83 percent eyed sustainable investing, compared with 30 percent of those aged 51 or older in both instances.
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