World’s rich put a third of funds into cash as trade war simmers

Economic Times: Bloomberg: 

Wealthy investors around the world are holding a relatively high level of cash, and perhaps they’ve become too cautious, according to UBS. 

The world’s largest wealth manager said 32% of high-net-worth portfolios are in cash, in a survey released on May 7. 

In Asia and Latin America, the portion was 36%, compared with 31% in Switzerland and 35% in the rest of Europe. The outlier: the US at just 23%. 
“Cash is a safe asset for a liquidity strategy but a risky one for longevity,” Paula Polito, client strategy officer at the Swiss bank’s Global Wealth Management unit, said. 

“We see high levels of cash globally. This is a good time for investors to consider a more diversified portfolio.” Those holdings dovetail with evidence about the rally in global equities, which shows investors have been keeping some money on the sidelines even as stocks have risen solidly in 2019. 

In February, Goldman Sachs Group said Asian funds were positioned all wrong for the nascent rally. And last month, a John Hancock strategist said there was some evidence of “FOMO undertow,” or the pull into stocks from fear of missing out on gains.

UBS said 42% of those surveyed planned to invest more, compared with 17% who were expecting to scale back. The top concern in Latin America was inflation, while in Asia it was a global trade war and in the US it was “my country’s politics.” It was UBS’s first ever quarterly Investor Sentiment survey, so there were no comparable figures from last year, a spokeswoman said. 


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