Self-Managed Super Fund and High Net Worth investors bullish on global investments
Certitude Global Investing Intentions Index reveals investors are still seeking more global exposure but more do not feel sufficiently equipped to invest internationally.
Investor seeking overseas investment options: Certitude
Prospective buyers of international assets continue to outnumber sellers according to the Certitude Global Investing Intentions Index (CGIII) with Self-Managed Super Fund and High Net Worth investors leading the way.
The CGIII Report found that SMSF investors are much more eager to invest offshore than their non-SMSF counterparts with 50% planning to do so within the next 3 months (in comparison to 33% of non-SMSF investors).
Meanwhile, HNW investors also signalled their bullishness toward international investments with the Index returning 190 points in November, compared to 174 points for all active investors in the same period. This marks the highest level of the Index for HNW investors to date.
The CGIII Report, produced each month by Investment Trends, collates the views of over 700 actively engaged leading investors. On the whole, 43% of all investors surveyed believe they need more international assets in their investment portfolio, up 8% points from October. This is in line with a corresponding decrease in the proportion expecting healthy growth in the Australian economy (59%, down 6% pts from October).
Craig Mowll, CEO of Certitude Global Investments said: “Last month we saw a strong uptick in Australian investors’ intentions to invest overseas and this month that intention was again signalled clearly, particularly from HNW and SMSF investors.
These investors can often be leading indicators of the rest of the market in identifying and taking advantage of the vast world of investment opportunity that exists outside of Australia.”
US/North America remains top choice, but gap is closing
The US remains the dominant international market of interest for those looking to invest overseas, despite a slight decline from October (38%, down 2% pts from October). While this region has consistently held the most allure for investors since the inception of this study, the gap is closing between all markets. November’s CGIII survey results found that both the US and Asia dropped in popularity, while international funds covering multiple regions, Western Europe, China and Japan all increased (see Figure no. 3, below).
Mr Mowll commented that the CGIII findings suggest that investors are not fully aligned with one geographic location or another, potentially lacking knowledge on where to allocate offshore assets.
“We are starting to see a convergence in terms of the overseas markets that investors are paying attention to when thinking about allocating offshore. One possible explanation is confusion from investors on where they should go to achieve true diversification benefits from international investing.”
Issues such as lack of knowledge, research or funds are becoming more significant barriers than market concerns When asked about barriers to investing overseas, ‘insufficient funds’ was named by the highest percent of investors (21%) as their main barrier, a large increase from 6% citing this reason in October. Of the top five barriers cited however, only one reflects concern in markets while the rest relate to a lack of knowledge or research available – 9% of investors say they don’t know enough about international investing and 7% said lack of research deterred them from allocating overseas.
Commenting on these findings Mr Mowll said, “The CGIII has been a valuable tool in evaluating where, when and how investors intend to invest internationally. This month, the stated barriers to international investing as well as the apparent indecision on where to allocate indicate that Australian investors feel insufficiently equipped to make informed decisions about which region or asset class they should invest in. This is something that global fund managers could be aware of when targeting Australian investors.”
November CGIII – Key Findings
- SMSF investors are much more eager to invest offshore than their non-SMSF counterparts with 50% planning to do so within the next 3 months (in comparison to 33% of non-SMSF investors).
- HNW investors marked their highest level of the Index to date returning to 190 points in November, compared to active Australian investors remaining broadly unchanged in at 174 (compared to 175 in October) in the same period.
- 43% of investors agree they need more international assets in their portfolio, an increase of 8% pts from last month.
- While the US/North America remains the region of most interest to those looking to allocate offshore (38% of those who want to invest overseas in the next year), overall the gap between various regions is narrowing.
- Market concerns are no longer the main barrier for investors looking overseas – 21% cite a lack of sufficient funds to invest with while 9% don’t have enough knowledge and 7% cite lack of research.
