Distribution of Assets of the UHNW


Alternative investments are gaining strength, but most very wealthy investors remain committed to placing investable funds in equities, a Spectrem study shows.

Spectrem’s study Asset Allocation, Portfolios and Primary Providers determines the details in the portfolios of affluent investors ranging in net worth from $100,000 up to $25 million. The extensive research looks into where the money is, where the money might end up in the future, and who is helping investors determine the best place for the money to go.

The investors are segmented into Mass Affluent (with a net worth between $100,000 and $1 million Not Including Primary Residence), Millionaire (with a net worth between $1 million and $5 million NIPR), and Ultra High Net Worth (with a net worth between $5 million and $25 million).

Examining the portfolios of Ultra High Net Worth investors, the Spectrem study shows that on average 68 percent of an investor’s net worth is comprised of investable assets, while 16 percent is invested in the principal residence. Less than 10 percent is invested in real estate, defined contribution, restricted stock, insurance, or privately held businesses.

Of the investable assets, almost 60 percent is placed in equities, while 21 percent is in fixed income products. Thirteen percent is in cash or liquid assets, while 5 percent is in alternative investments.

Equities is the largest portion of a UHNW investor’s portfolio, and a majority of UHNW investors are in the stock market. Eighty-four percent of investors own stocks, with 1.5 million invested on average. Almost 80 percent are invested in U.S. stock mutual funds, with $1.17 million invested.

A continued increase in the globalization of the investment market shows in the news that 53 percent of UHNW investors have a portion of their investable assets in international or foreign mutual funds to the tune of $419,000 per investor.

Alternatives are also a growing investment option, and 40 percent of UHNW investors have funds in domestic Exchanged Traded Funds, while 23 percent are invested in International Exchange Traded Funds. Almost one-third of investors have funds in individual international stocks.

The Spectrem study reveals that younger investors are more likely to spread their investable assets among all equity options.