Learn To Invest
Stocks Special Reports LICs Credit Funds ETFs Tools SMSFs
Video Archive Article Archive
News Stocks Special Reports Funds ETFs Features SMSFs Learn
About

News

High-net worth investors hungry for guidance

Glenn Freeman  |  04 Jan 2018Text size  Decrease  Increase  |  
Email to Friend

Page 1 of 1

In the year ahead, investors are particularly hungry for insights and information on equities, exchange-traded funds, managed funds and portfolio asset allocation, according to a recent survey of high-net worth investors.

Conducted by market research firm Investment Trends and concluding in the third-quarter of 2017, the study finds there are 435,000 investors within this high-net worth cohort, with more than $1 million in investable assets -- excluding their residential home, business and retail superannuation fund.

“Almost all high-net worth investors say they expect to face investment-related challenges in the coming year, and this uncertainty has led to a large build-up of cash holdings.

“Right now, the perceived threat of another global financial crisis and difficulties in investment selection are the two biggest concerns of HNWs,” says King Loong Choi, senior analyst, Investment Trends.

This view on a more difficult investment environment in 2018 is echoed by Peter Warnes, head of equities research, Morningstar Australasia, in his Forecast 2018. The full report is available to Morningstar subscribers.

On a macro-economic level, he believes 2018 "will see the clash of monetary and fiscal policy on a major scale." In the US, he refers to "the largest monetary tightening process in history with equally the largest ill-timed non-wartime fiscal stimulus".

"When the market turns, the untested redemption phase could be associated with a violent and volatile correction," Warnes says.

Closer to home, the Australian household sector is weighing most heavily on the economy. "The country’s economic growth is more dependent on the sector than the combined influences of total investment, both government and private sector, net exports and construction," Warnes says.

Globalisation, demographics, technology

A global outlook for 2018 from asset manager Vanguard is among the most bearish it has released in the last decade.

It highlights the combined effects of globalisation, demographics, and technology -- viewed as long-term cycles rather than short-term trends.

“We anticipate a bit more volatility and an uptick in inflation in the year ahead, accompanied by more muted equity returns," says Joseph Davis, global chief economist, Vanguard.

Much like Warnes' assessment, Vanguard's outlook focuses on Australian households in assessing the domestic outlook.

Unlike expectations for continued improvement for much of the developed world, Vanguard sees elevated potential downside risks for the Australian economy. It finds Australia's "uninterrupted expansion, now into its 105th quarter, the longest in modern history, may have resulted in a positivity bias among investment analysts and investors".

Specific factors here include the fading of our housing construction boom and higher household debt, pointing to a "base case where the Australian economy centres on growth below trend at between 2 per cent and 2.5 per cent".

Help wanted

Unsurprisingly, given this outlook, Investment Trends' King says investors' growing appetite for more research and information on where to invest their money was a key finding of its study. The survey collected responses from 1,483 Australian high-net worth investors, and focused on those with between $1 million and $70 million in net investable assets.

Information on retirement and tax strategies were among the top information needs among the investors surveyed, with around 50 per cent of respondents wanting assistance on how to structure their finances once they retire from full-time work.

According to King, 44 per cent wanted information on specific shares and stock selection; 36 per cent wanted information on investments outside shares -- including ETFs and managed funds.

"Finally, 25 per cent wanted more information on asset allocation and diversification," he says.

 More from Morningstar

• Amazon rise rattles retailers but not economies

• Large-cap stocks to watch

Make better investment decisions with Morningstar Premium | Free 4-week trial

 

Glenn Freeman is Morningstar's senior editor.

© 2018 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This information is to be used for personal, non-commercial purposes only. No reproduction is permitted without the prior written consent of Morningstar. Any general advice or 'class service' have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), or its Authorised Representatives, and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product's future performance. To obtain advice tailored to your situation, contact a licensed financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO"). The article is current as at date of publication.

is senior editor for Morningstar Australia

© 2018 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This information is to be used for personal, non-commercial purposes only. No reproduction is permitted without the prior written consent of Morningstar. Any general advice or 'class service' have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), or its Authorised Representatives, and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product's future performance. To obtain advice tailored to your situation, contact a licensed financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782. The article is current as at date of publication.

Email To Friend