Rich in­vestors tip mar­ket to rise 8pc

Townsville Bulletin - - Investor -

AUS­TRALIA’S rich­est peo­ple aim to have 40 per cent of their as­sets held in di­rect shares and ex­pect the share mar­ket to rise by 8 per cent in 2011.

But high net worth in­vestors ( HNW) and the ul­tra rich are set­ting more con­ser­va­tive in­vest­ment goals and turn­ing their backs on risky strate­gies such as gear­ing, re­search from In­vest­ment Trends and Cen­tric Wealth shows.

Aus­tralia’s HNW in­vestors have more than $ 1 mil­lion each in in­vestable as­sets.

In the 12 months to De­cem­ber, they shifted their money away from in­vest­ments in r esi den­tial prop­er­ties i n favour of di­rect shares and term de­posits, the com­pa­nies re­ported yes­ter­day.

Their on­line sur­vey of 7811 i n v e s t o r s , c o n d u c t e d i n Novem­ber and De­cem­ber, pro­duced a snapshot of 1967 HNW i nvestors, with 8 8 qual­i­fy­ing as Ul­tra High Net Worth ( UHNW) in­vestors with be­tween $ 10 mil­lion and $ 60 mil­lion to in­vest.

As a com­bined in­vestor class, 32 per cent of their to­tal as­sets were in­vested in di­rect shares by De­cem­ber 2010.

That’s up 4 per cent from a year ear­lier when the All Or­di­nar­ies was hov­er­ing around 4720 – just 26 points lower than its clos­ing level yes­ter­day. In De­cem­ber 2009, HNW in­vestors ex­pected the All Or­di­nar­ies would surge 12 per cent in 2010.

But 12 months later, hav­ing ob­served the mar­ket’s fall on the Euro­pean debt cri­sis, their ex­pec­ta­tions re­mained pos­i­tive, but more mod­est, with the group tip­ping an 8 per cent rise for the in­dex in 2011. Still, most HNW in­vestors think 40 per cent of their port­fo­lio should be in di­rect shares, 9 per cent in man­aged funds and 17 per cent in res­i­den­tial prop­erty in­vest­ments – 4 per cent lower than the al­lo­ca­tion they had made by De­cem­ber 2010.

They have also be­come more in­ter­ested in in­vest­ing in off­shore mar­kets, par­tic­u­larly China, In­dia and other emerg­ing mar­kets.

But on other fronts, rich in­vestors have be­come more con­ser­va­tive, in­creas­ing the pro­por­tion of their as­sets held in cash and term de­posits in 2010 and telling In­vest­ment Trends and Cen­tric Wealth they would like to al­lo­cate more to these as­set classes.

Fewer are tar­get­ing max­i­mum cap­i­tal growth as an in­vest­ment goal, and now say they want to max­imise their in­vest­ment in­come, p r e s e r v e t h e i r e x i s t i n g wealth and build sus­tain­able in­come streams for their re­tire­ment.

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