More than half of high net worth investors expect a sell-off before the end of 2020, citing the global political uncertainty as a key risk.
79 percent of respondents in a recent UBS survey are expecting volatility to increase in 2020 with 55 percent betting on a sell-off before the end of the year.
72 percent believe the investment environment is «more challenging» compared to five years ago with 66 percent calling geopolitics a greater driver than fundamentals. The ongoing U.S.-China conflict and the upcoming American presidential election were named as investors' top worries.
«The rapidly changing geopolitical environment is the biggest concern for investors around the world,» said Paula Polito, client strategy officer at UBS Global Wealth Management. «They see global interconnectivity and reverberations of change impacting their portfolios more than traditional business fundamentals, a marked change from the past.»
Portfolio Moves
Whilst cash levels have gone down – respondents claimed to hold 25 percent of assets in cash compared to 32 percent in May – risk aversion continues to be at play with 60 percent considering to increase the allocation. Others that wish to remain invested seek diversification, as agreed by 62 percent of respondents.
Asian respondents expressed greater optimism, especially about the more distant future with a whopping 91 percent aligning portfolios with long-term trends including sustainable investing (86 percent). Millennial and other young investors expressed similar sentiments with 69 percent stating they felt optimistic about returns in the next decade.
The survey was conducted with more than 3,400 respondents across 13 markets with a minimum of $1 million in investable assets.
