Exclusive: Investors prioritise security as they flock to low risk assets
UK investors are shifting their attention to low risk assets as they prioritise security over returns in their investment strategies for the next year.
A survey of almost 900 UK investors by Butterfield Mortgages reveals that nearly half have lost money due to the volatility caused by the pandemic. In times of uncertainty, investors will naturally favour a safer investment route as they look to protect their current investments.
As a result 35 per cent of investors with portfolios worth over £10,000 have already shifted from high risk to low risk assets this year. And this trend is set to continue into 2021 as they grapple with the fallout from the pandemic and Brexit. Some 59 per cent of investors are prioritising safer assets next year, which rises to 63 per cent for investors with a portfolio valued over £50,000.
As well as caution over market volatility, investors are holding back on making investments until there is a return to some semblance of normality. Butterfield’s survey found that 47 per cent of respondents do not plan to make any investment decisions until they can physically meet with financial service providers and advisers.
Previous research suggests many investors are flocking to cash even with interest rates at historic lows and the Bank of England mulling negative interest rates, in large part because economic and job uncertainty is pushing people towards savings.
“With the government’s recent Spending Review highlighting the vast economic repercussions of COVID-19, it is clear why investors are hesitant and not planning to make major decisions until there is greater certainty,” said Alpa Bhakta, chief executive of Butterfield Mortgages.