Portfolio adjustments reduced among HNWs

High net worth portfolio

High net worth investors were less inclined to make significant changes to their portfolio allocations in the year ended July 2022.

The latest research into the behaviour of high net worth (HNW) investors has shown just over one-third of this cohort significantly adjusted their portfolio allocations in the year to July 2022.

Specifically, the Investment Trends “2022 High Net Worth Investor Report” revealed a tapering of significant portfolio weighting changes among this group, with 37 per cent of HNWs making substantial changes to their asset holdings up to July this year.

Of the individuals who adjusted their portfolio holdings significantly, 37 per cent changed at least 10 per cent of their asset allocation. This represented a drop in this course of action from 2021 and 2020 when 47 per cent and 50 per cent of HNW individuals changed at least 10 per cent of their portfolio make-up respectively.

“Looking ahead, HNW investors have recalibrated their investment goals in line with a more subdued outlook for the next 12 months and increasingly more are looking to protect their wealth against a market downturn,” Investment Trends head of research Irene Guiamatsia noted.

“Correspondingly, demand for asset classes is evolving, with fixed income emerging as an area of particular interest.”

Despite this development, the study indicated investments in direct shares and property remained most popular among the cohort with a noticeable emerging interest in exchange-traded funds.

With a view to their succession, the report found HNWs intend to pass down $2 trillion, or 70 per cent of their total assets, to the next generation.

When looking for assistance that will allow them to implement a strategy to achieve this aim, the survey revealed financial advisers are HNWs’ primary source of reference.

“This annual research always explores in a great deal of detail how product issuers, advice providers and technology providers can best support high net worth investors. This year’s report shines a light on the sharper focus HNW families are placing on wealth preservation across generations,” Guiamatsia noted.

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