Investors worldwide are holding ‘high’ levels of cash in their portfolios, says UBS Global Wealth Management.
Investors worldwide are holding “elevated levels” of their assets in cash, says UBS Global Wealth Management. The firm said 41% of investors are considering putting cash to work in stocks over the next six months. US investors are the most upbeat as confidence in the domestic economy has climbed, the firm’s sentiment survey showed. See more stories on Insider’s business page.
Investors worldwide are holding “elevated levels” of cash in their portfolios but nearly half of them are thinking of putting that money to work in stocks this year, according to a survey by UBS Global Wealth Management published Wednesday.
The firm’s quarterly investors’ sentiment survey showed cash and cash-equivalents such as certificates of deposit formed 22% of portfolios held by individual investors, slipping from 25% since September 2020.
The firm called the weighting “high” and said it is in contrast with improvement in market and economic conditions such as equities rallying to record highs and the vaccination of millions of people against COVID-19. The survey found that 62% of investors hold at least 10% of their assets in cash.
41% of investors told UBS they are considering increasing their holdings in stocks over the next six months, and 64% believe equities are an effective avenue of diversification during economic recovery from the pandemic.
UBS said 12% of survey respondents planned to cut their exposure to stocks and 47% aimed to make no changes to portfolios.
“Investors’ cash holdings are still far higher than our recommended allocations, especially given the current market and economic environment, so it is encouraging that they are looking to invest more in equities,” said Tom Naratil, co-president of UBS Global Wealth Management, in the survey’s statement. “If inflation picks up, the value of cash will be eroded in real terms, and investors will be forced to look to other asset classes to help meet their financial goals.”