Survey Shows Regional Investment Trends Amongst The Wealthiest Investors

by Phillip Morton, Investors Offshore.com

04 February 2005

A Citigroup Private Bank survey of the investment strategies used by ultra-high-net-worth individuals has found that distinct regional preferences exist in the investment behaviour of the wealthy.

The 'Citigroup Survey of the World's Wealthiest Families: Wealth Management Attitudes and Perspectives,' questioned the most affluent investors in the world on their views on how they manage their wealth, their investment priorities and their risk profiles.

The survey is a compilation of findings from 120 detailed interviews with individual investors in the US, Latin America, Europe, the Middle East and the Asia Pacific Region who each had a net worth of more than $25 million - although more than 60% of the participants had a net worth in excess of $100 million.

Among the key findings, it was revealed that US investors have the strongest demand for, and knowledge of, alternative products in comparison to investors from other regions, whereas Europeans have become increasingly interested in ‘hard assets’ such as art or real estate.

Investors in the Middle East also have a preference for real estate, but also attempt to seek out capital protected products, whereas investors in Asia Pacific region are increasingly looking at local investment opportunities.

Meanwhile, Latin American investors were found to be more focused on the strength of their financial institution and did not show a particular preference for a single asset class.

However, the survey found that ultra-affluent investors the world over remain susceptible to the same common mistakes as the wider investment community, such as chasing riskier short-term performance with regards to both asset class and investment managers.

Wealthy investors may also be tempted to time the market or underweight unfamiliar asset classes in their investment portfolios.

David Rosenberg, U.S. Head of Investment Solutions at The Citigroup Private Bank, observed: "The survey confirmed some widely reported trends among ultra-affluent investors such as the increasing financial sophistication of this population overall and their continued interest in alternative investments.

He added: “However, it also highlighted what we believe is a real need for investors to look at their asset allocation holistically and better understand the risks that may be present."

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