HNW Asset Allocation Trends

Powered by

All the vital news, analysis, and commentary curated by our industry experts.

$7995

The most striking trend is the surge in alternatives, which constitute an increasingly large share of the typical portfolio as investors seek diversification from traditional investments. We are also seeing rising demand for exchange-traded funds, which thanks to the diversification they provide and their low costs are rapidly growing in popularity. Drawn in by capital appreciation opportunities, investors are forecast to channel more wealth into equities. This trend will be particularly pronounced in Europe, where investors are hoping that loose monetary conditions will finally stimulate equity markets. In the fixed income space, HNW investors are moving out of high-yield bonds, with investor concern mounting as volatility in the junk bond market persists. In many global markets wealth managers will have a tough time promoting bond holdings in general. Their best bet will be bond funds thanks to the diversification benefits they provide.

Scope

Verdict Financial’s “HNW Asset Allocation Trends” draws on our 2015 Global Wealth Managers Survey to analyze HNW asset allocation strategies in 20 key markets. In particular, it examines the drivers behind investment choices now and over the next 12 months. Draws on our proprietary 2015 Global Wealth Managers Survey to present consistent data across 20 markets.

• Analyze HNW asset allocation strategies in 20 key HNW markets including Australia, the UK, and the US.

• Understand the drivers that determine HNW investment preferences.

• Interpret the macroeconomic, demographic, and attitudinal trends that are shaping HNW investment behavior.

• Accompanied by an online interactive dashboard to enable users to select and view the data of their choosing.

Reasons to Buy

Get fact-based insight into HNW investors’ asset allocation preferences from our proprietary 2015 Global Wealth Managers Survey.

Remain a step ahead of competitors by anticipating investment trends and adjusting your service proposition accordingly to cater to HNW investors’ changing investment preferences.

Be able to service HNW investors more thoroughly by understanding what is driving investment choices and how asset allocation strategies are going to change over the next 12 months.

Table of Contents

EXECUTIVE SUMMARY

HNW investment preferences are shaped by a multitude of factors

Key findings

Critical success factors

REGIONAL ASSET ALLOCATION TRENDS

The global HNW portfolio is well diversified

Equities dominate the typical HNW portfolio

Alternative investments have become more popular, at the expense of bonds

Despite recent downturns, commodities continue to find a place in the typical HNW portfolio

Detailed analysis shows HNW investors have strong appetite for direct equity, local currency products, equity funds, and direct property

Direct holdings constitute the bulk of equity investments, but ETPs are growing in popularity

Bond funds are the preferred type of fixed income investment

Local currency products prevail as part of HNW investors' cash investments, but there are exceptions

High direct property holdings limit wealth managers' fee-earning potential

Hedge funds have emerged as the preferred alternative investment among HNW investors

Commodity ETPs have overtaken mutual funds in popularity

There are significant regional differences when it comes to HNW investors' asset allocation preferences

The typical HNW portfolio in the West and the Middle East and Africa is heavily skewed towards equities

Real estate features prominently in the typical HNW portfolio in Asia Pacific and the Middle East and Africa

The drop in commodity prices hit investors in resource-rich countries hard

Demand for alternatives is particularly strong in North America

HNW INVESTMENT DRIVERS

Equity holdings are driven by the capital appreciation opportunities they provide

Positive stock market conditions are driving equity investments

Capital appreciation opportunities will continue to drive HNW demand, but not everywhere

Dividend income as a driver of equity investments is of particular importance in a number of countries

Bonds are traditionally important to risk-averse HNW individuals

Quantitative easing in Europe will continue to have a negative effect on bond holdings

Risk aversion and asset diversification are the main drivers of bond investments

Current returns are driving bond holdings in emerging markets, and wealth managers will do well to educate clients about the risks involved

Cash and near-cash products are favored as a means of maintaining liquidity

HNW investors are forecast to reduce their cash holdings, albeit only slightly

Risk aversion and a desire to maintain liquidity are the top two drivers for cash investments

Rising consumer confidence will have an adverse effect on deposit holdings in Europe

Education is key to lure clients away from deposits in certain markets

Real estate investments are driven by HNW investors' desire to be able to rely on rental income

Global HNW investments in real estate are forecast to rise

Rental yields and property price movements are the main drivers for HNW investments in real estate

Economic distress is driving demand for real estate in Russia

Alternative investments are becoming increasingly important for their diversification benefits

HNW demand for alternatives is forecast to increase in all but one country

Future capital appreciation is the primary driver of alternatives demand

HNW individuals also invest in alternatives to diversify their portfolio

Going forward, we expect dissatisfaction with traditional asset classes as a driver for alternatives to become more important

Other HNW drivers for alternatives include the perception of exclusivity and current returns

Commodities largely act as a diversifier in the average HNW portfolio

Demand for commodities is set to rise, but only for selected products

Their reputation as an important diversifier has seen commodities become an integral part of the typical HNW portfolio

HNW investors are also betting on capital appreciation opportunities in the commodity space

APPENDIX

Abbreviations and acronyms

Supplementary data

Definitions

HNW

Liquid assets

Methodology

Verdict Financial's 2015 Global Wealth Managers Survey

Verdict Financial's 2014 Global Wealth Managers Survey

Verdict Financial's 2013 Global Wealth Managers Survey

Bibliography

Further reading

About Verdict Financial

Disclaimer

Table

Table 1: 10-year government bond rates

Table 2: Real house price growth, annual percentage change (selected countries)

Table 3: Equity index movements and gross rental yields in Europe

Table 4: Real house price growth, annual percentage change (selected countries)

Table 5: HNW investment drivers by country: equities, 2015

Table 6: HNW investment drivers by country: bonds, 2015

Table 7: HNW investment drivers by country: cash and near-cash products, 2015

Table 8: HNW investment drivers by country: property, 2015

Table 9: HNW investment drivers by country: alternatives, 2015

Table 10: HNW investment drivers by country: commodities, 2015

Figures

Figure 1: Alternative investments have become increasingly popular

Figure 2: 2015 was a rough year for commodities

Figure 3: ETPs are becoming increasingly popular among HNW investors

Figure 4: Bond funds form the largest component of HNW investors' fixed income investments

Figure 5: Local currency products are the most common type of cash investment

Figure 6: A significant proportion of HNW wealth is locked up in property

Figure 7: Hedge funds dominate in HNW investors' alternatives portfolios

Figure 8: ETPs form the largest component of HNW investors' commodity investments

Figure 9: Global markets have been subject to significant volatility

Figure 10: Investors' attitude towards risk differs significantly across the globe

Figure 11: The majority of wealth managers expect HNW equity demand to rise

Figure 12: Capital appreciation opportunities are motivating HNW investors to channel their wealth into equities

Figure 13: Global demand for bond holdings will be varied

Figure 14: Risk aversion is driving bond investments in the HNW space

Figure 15: Direct bond holdings dominate in emerging markets

Figure 16: Global HNW cash holdings will increase over the next 12 months

Figure 17: Risk aversion is the top driver for cash investments

Figure 18: Rising consumer confidence will result in deposit holdings declining in the Europe

Figure 19: HNW property investments are largely forecast to rise over the next 12 months

Figure 20: Rental yields constitute the number one driver of real estate investments

Figure 21: HNW demand for alternatives in Australia is forecast to skyrocket

Figure 22: Capital appreciation is the number one driver of alternative investments

Figure 23: Commodity holdings are set to increase in the HNW space

Figure 24: The benefits of asset diversification are driving commodity investments

Figure 25: Amid global uncertainty, the price for precious metals skyrocketed in 2016

Frequently asked questions

HNW Asset Allocation Trends standard reports
Currency USD
$7,995

Can be used by individual purchaser only

$23,985

Can be shared globally by unlimited users within the purchasing corporation e.g. all employees of a single company


Undecided about purchasing this report?

Enquire Before Buying

Get in touch to find out about multi-purchase discounts

reportstore@globaldata.com
Tel +44 20 7947 2745

Every customer’s requirement is unique. With over 220,000 construction projects tracked, we can create a tailored dataset for you based on the types of projects you are looking for. Please get in touch with your specific requirements and we can send you a quote.

See what our customers are saying

“The GlobalData platform is our go-to tool for intelligence services. GlobalData provides an easy way to access comprehensive intelligence data around multiple sectors, which essentially makes it a one-for-all intelligence platform, for tendering and approaching customers.

GlobalData is very customer orientated, with a high degree of personalised services, which benefits everyday use. The highly detailed project intelligence and forecast reports can be utilised across multiple departments and workflow scopes, from operational to strategic level, and often support strategic decisions. GlobalData Analytics and visualisation solutions has contributed positively when preparing management presentations and strategic papers.”

Business Intelligence & Marketing Manager, SAL Heavy Lift

“COVID-19 has caused significant interference to our business and the COVID-19 intelligence from GlobalData has helped us reach better decisions around strategy. These two highlights have helped enormously to understand the projections into the future concerning our business units, we also utilise the project database to source new projects for Liebherr-Werk to use as an additional source to pitch for new business.”

Market Analyst & Management, Liebherr-Werk

Your daily news has saved me a lot of time and keeps me up-to-date with what is happening in the market, I like that you almost always have a link to the source origin. We also use your market data in our Strategic Business Process to support our business decisions. By having everything in one place on the Intelligence Center it has saved me a lot of time versus looking on different sources, the alert function also helps with this.

Head of Key Accounts, Saab AB

Having used several other market research companies, I find that GlobalData manages to provide that ‘difficult-to-get’ market data that others can’t, as well as very diverse and complete consumer surveys.

Marketing Intelligence Manager, Portugal Foods

Our experience with GlobalData has been very good, from the platform itself to the people. I find that the analysts and the account team have a high level of customer focus and responsiveness and therefore I can always rely on. The platform is more holistic than other providers. It is convenient and almost like a one stop shop. The pricing suite is highly competitive and value for our organisation.

I like reports that inform new segments such as the analysis on generation Z, millennials, the impact of COVID 19 to our banking customers and their new channel habits. Secondly the specialist insight on affluent sector significantly increases our understanding about this group of customers. The combination of those give us depth and breadth of the evolving market.

I’m in the business of answering and helping people make decisions so with the intelligence center I can do that, effectively and efficiently. I can share quickly key insights that answer and satisfy our country stakeholders by giving them many quality studies and primary research about competitive landscape beyond the outlook of our bank. It helps me be seen as an advisory partner and that makes a big difference. A big benefit of our subscription is that no one holds the whole data and because it allows so many people, so many different parts of our organisation have access, it enables all teams to have the same level of knowledge and decision support.

Head of Customer Insight and Research, Standard Chartered

“I know that I can always rely on Globaldata’s work when I’m searching for the right consumer and market insights. I use Globaldata insights to understand the changing market & consumer landscape and help create better taste & wellbeing solutions for our customers in food, beverage and healthcare industries.

Globaldata has the right data and the reports are of very high quality compared to your competitors. Globaldata not only has overall market sizes & consumer insights on food & beverages but also provides insights at the ingredient & flavour level. That is key for B2B companies like Givaudan. This way we understand our customers’ business and also gain insight to our unique industry”

Head of Consumer Sensory Insights, Givaudan

GlobalData provides a great range of information and reports on various sectors that is highly relevant, timely, easy to access and utilise.  The reports and data dashboards help engagement with clients; they provide valuable industry and market insights that can enrich client conversations and can help in the shaping of value propositions. Moreover, using GlobalData products has helped increase my knowledge of the finance sector, the players within it, and the general threats and opportunities.

I find the consumer surveys that are carried out to be extremely beneficial and not something I have seen anywhere else. They provided an insightful view of why and which consumers take (or don’t) particular financial products. This can help shape conversations with clients to ensure they make the right strategic decisions for their business.

One of the challenges I have found is that data in the payments space is often piecemeal. With GD all of the data I need is in one place, but it also comes with additional market reports that provide useful extra context and information. Having the ability to set-up alerts on relevant movements in the industry, be it competitors or customers, and have them emailed directly to me, ensures I get early sight of industry activity and don’t have to search for news.

Senior Account Manager, TSYS
Financial Services
New
Worldline - Competitor Profile
$350 | March 2024
Financial Services
New
Huawei Pay - Competitor Profile
$350 | April 2024
Financial Services
New
Kuwait Cards and Payments - Opportunities and Risks to 2028
$2,750 | April 2024
Go even deeper with GlobalData Intelligence Center

Every Company Report we produce is powered by the GlobalData Intelligence Center.

Subscribing to our intelligence platform means you can monitor developments at HNW Asset Allocation Trends in real time.

  • Access a live HNW Asset Allocation Trends dashboard for 12 months, with up-to-the-minute insights.
  • Fuel your decision making with real-time deal coverage and media activity.
  • Turn insights on financials, deals, products and pipelines into powerful agents of commercial advantage.