Richest Investors Return to Equities, Study Says, Private Wealth - January 23, 2014


The richest investors are leading a return to equities, while investors of all wealth levels continue to show increased interest in ETFs, according to a new Spectrem Group study.

Ultra-high-net-worth investors with more than $5 million to invest will continue to favor equities, while mass affluent investors—those with $100,000 to $1 million—tend to prefer short-term accounts, according to the report. Investors with $1 million to $5 million are equally split between the two alternatives, Spectrem says.

“Ultra-high-net-worth investors have regained the comfort they lost in the financial crisis, favoring equities after benefitting from their decision to do so last year,” says Spectrem Group President George H. Walper Jr. “Mass affluents missed the equities wave and continue to be conservative in their investment strategy, while millionaires are caught somewhere in the middle.”

ETFs are growing in popularity among investors of all levels of wealth, according to the report. Among the mass affluent, mutual funds have dropped significantly in asset value since 2009, while the average balance in ETF accounts has doubled during the same period.

Last year, 52 percent of ultra-high-net-worth investors owned ETFs, compared with only 25 percent in 2009, according to Spectrem. Younger investors in this group were most involved in ETFs. Sixty-one percent of ultra-high-net-worth investors aged 44 and under owned domestic ETFs and 52 percent owned international ETFs.

As wealth increases, investors tend to become more interested in international investments, with 37 percent of ultra-high-net-worth investors indicating they will make international investments in the next 12 months. This compares to 28 percent of millionaires and 17 percent of mass affluents.


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