The UK-headquartered asset manager surveyed more than 15,700 “active” investors (i.e. those with €10,000 or equivalent they are planning to invest in 2014) from 23 different countries, asking about their confidence, investment intentions and strategy for the coming year and about any economic concerns they have.
Overall, the results marked a positive change in investor sentiment, with more than half (56%) of investors saying they are more confident about 2014 than they were at the start of 2013 and more than 70% saying they plan to invest in equities.
It should be noted the survey was conducted at the start of the year ahead of some market wobbles seen more recently following announcements of further tapering by the US Federal Reserve of its quantitative easing programme.
In its combined summary of investor responses from Europe and the United Arab Emirates, Schroders noted the three highest concerns for investors were increasing taxes (28%), the eurozone debt crisis (27%) and continuing current low levels of interest rates (24%).
Investors in the UAE were among the most confident in the world about the next 12 months, being one of only four countries sampled where more than 70% of respondents said they were either a lot more confident or a little more confident about their investments this year.
Interestingly, more than half (57%) said the Middle East would deliver the best growth in the coming year. Globally, only 12% of investors saw the biggest growth coming from the Middle East.
In fact, investors were more drawn by the more developed or established economies for growth this year picking Asia Pacific, North America and Western Europe as the three leading regions for this year.
Guidance needed
What is also clear from the research, is that a disconnect exists between what investors aspire to do and the reality of their investment strategy.
This is demonstrated by the percentage of respondents who said they want to save for their retirement, yet have relatively short investment horizons.
Some examples include the UAE where 54% said they want to save for retirement, yet have an investment horizon of 4.4 years, Hong Kong where 44% want to save for retirement but have an investment horizon of just three years and Singapore where 41% want to save but have an investment horizon of four years.
These figures are similar across Europe where, if anything, a greater number of investors want to save for retirement, but still have investment horizons of between three and 4.8 years.
Carlo Trabattoni, head of pan European intermediary distribution at Schroders, notes that while investor’s intentions are good, they need guidance.
“The approach needs to be guided, hence we believe the need for clients to receive proper educated advice on how to manage their needs for the long term will become increasingly important,” said Trabattoni.
“On the other hand, you have to see there is still a degree of investment immaturity from an investor perspective when you have to conciliate objectives with actions. And, with an aging population, greater life expectancy and the scaling back of governments in terms of pensions forming the basis for what we are going to have to live and breathe for years, advice and education will only grow in importance.”
