Winners and losers in 2018 global wealth market
By Cristian Angeloni and Robbie Lawther, 28 Jan 19
WealthX’s high net worth handbook reveals some big changes within the wealth sector last year
Click through the slides below to find out more
Rush to cash
Liquid assets were the most allocated investment for HNWs in 2018, with portfolios made up of around 40.6% of the asset.
Private holdings (23.5%), public holdings (19.8%) and alternative assets (16.1%) made up the rest of the allocations.
Charu Lahiri, investment manager at Heartwood Investment Management, the asset management arm of Handelsbanken in the UK, told IA: “Investors are increasingly being drawn to cash and cash equivalents (like money market funds and very liquid debt) for capital preservation amid greater market uncertainty.
“But while cash is rarely considered to be a ‘strategic’ asset, we believe that it has a key long-term role to play within a well-structured multi asset portfolio.
“Cash is an ‘all weather’ diversifier – its performance has a consistently low correlation to that of other asset classes. Cash returns generally move with inflation. Due to the ‘short duration’ nature of cash, it can therefore prove to be an important hedge during periods of rising interest rates.
“It can serve a crucial tactical purpose, providing liquidity at times of market stress. It allows investors to purchase cheap assets when forward-looking return expectations are improving.”
More and more people have also been shifting their investments into gold as well as cash. The Pure Gold Company said it saw a 173% increase in enquiries, as investors are expecting further market volatility.
Tags: Cash | Gold | High Net Worth | Liquidity
