69 per cent of high net worth individuals are now looking to ‘rebalance and diversify’ their investment portfolios in order to reduce their exposure to UK-based assets in the wake of the Brexit vote, a global poll reveals.
When asked “Do you intend to decrease your investment exposure to the UK during the remainder of 2016 following Britain’s decision to leave the EU?” 69 per cent of clients contacted by deVere Group, one of the world’s largest independent financial advisory organizations, said ‘Yes’.
18 per cent responded ‘No’ and 13 per cent did not yet know.
770 people with investable assets of 1.3m USD or more from countries including the U.S., the UK, Australia, the United Arab Emirates, Qatar, Hong Kong, South Africa and Switzerland were surveyed in July 2016.
Nigel Green, deVere Group’s founder and CEO, says: “This new poll’s results show that high net worth investors are overwhelmingly considering rebalancing and diversifying their portfolios following the UK’s decision to leave the European Union.
“These HNW investors are seeking to reduce their exposure to UK-based assets in the wake of the impending Brexit. It would appear that they believe Brexit negotiations will be complex, and are likely to cause a flatter UK economy, and that other countries will achieve higher levels of growth in this period and, therefore, will produce higher returns.”
He continues: “The survey underscores that Brexit is becoming a catalyst for high net worth investors to widen the scope of diversification within their portfolios. This is something we champion.
“Indeed, irrespective of the Brexit vote, it is always recommended that for investors to ‘think global’ in regards to their portfolio.
“Three of the fundamentals of a properly-diversified portfolio are investing across geographical regions, industrial sector and asset class.
He adds: “It is a myth that international investing presents a higher risk. The more diversified the investment portfolio, encompassing a global focus, the greater the reduction of risk.
“Furthermore, investors must ‘think global’ when it comes to considering other geopolitical risks. These include China’s economic growth; the threat of a Brexit contagion-effect as other member states potentially seek to exit the European Union, and the U.S. election in November.
The deVere CEO concludes: “Brexit is now acting as a prompt for high net worth investors to ensure their portfolios are properly diversified due to heightened concerns over the UK economy.
“A well-diversified portfolio places investors in a prime position to make the most of opportunities, whilst simultaneously mitigating risk.
“Whilst the trend is clear for people to consider a shift away from UK-based assets, UK property appears to remain immune from this, with deVere Mortgages reporting a surge in enquiries since Brexit.”