Rich investors tip market to rise 8pc
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.