Global High-Net-Worth Preference Report: Direct vs Fund Investment 1

Direct vs Fund Investments: HNW Preferences
No of Pages – 38
Publishing Date - May 21, 2016
Browse detailed TOC, Tables, Figures, Charts in Direct vs Fund Investments: HNW
Preferences at- http://www.absolutereports.com/10178044
Summary
Globally, 44% of HNW wealth is held via funds as opposed to directly. However, there are
significant regional differences when it comes to investment preferences. For example, HNW
investors in the US, and to a lesser extent in Western Europe, are significantly more likely to invest
in funds than their peers in Central and Eastern Europe, Asia Pacific, and the Middle East.
Furthermore, while equity funds prevail across the globe, they are particularly prominent in the West.
There are also strong differences across asset classes when it comes to the drivers to invest in funds.
While asset diversification benefits feature strongly across all asset classes, lack of time to research
direct equity investments is a key driver for fund holdings in the equity space, while an expectation
of better returns motivates HNW investors to opt for alternative investment funds as opposed to
direct holdings.

Key Findings
- Diversification benefits are the number one driver why HNW investors opt for funds as opposed to
direct holdings, and in light of ongoing market turbulences, wealth managers would do well to
provide a strong range of funds that offer not only exposure to different industries, but also
geographies and asset classes.

- No longer the reserve of institutional or mass affluent investors, exchange-traded funds (ETFs)
form an increasingly large part of HNW investors' portfolios, and being able to offer a wide range of
such funds next to more sophisticated products is becoming more and more important.

- A large chunk of HNW wealth is locked up in direct property; wealth managers would do well to
convince their clients of the benefits of property funds so as to increase their fee income.

- While HNW investors tend to be well-diversified across asset classes and geographies, industry
diversification is equally important - something wealth managers should discuss with their clients.