Investors Rally to Traditional Assets Amidst Political Uncertainty

Butterfield Mortgages Limited (BML) recently commissioned an independent survey of more than 1,100 UK-based investors (all with investments in excess of £10,000) to find out what asset classes currently make up their financial portfolios and what factors are influencing their investment strategies in 2020.

The research found that:

  • The most common assets investors hold are stocks and shares (53%), property (41%) and bonds (30%)
    • 20% of investors said they plan to increase the amount of money they have invested in real estate in 2020
    • 61% of investors believe traditional assets like property are best positioned to deliver stable and secure returns during the current political uncertainty
  • Art and forex (both 19%), cryptocurrencies (17%) and classic cars (16%) were the least common investments
    • 10% of those who have invested in cryptocurrency plan to reduce their amount of investment in this asset in the new year
    • 64% of investors do not think cryptocurrencies are a safe or reliable investment
  • 43% have become more socially and environmentally conscious in their financial strategies
  • 42% are holding off making any major investment decisions until Brexit has been resolved

UK investors are turning to traditional assets as a result of the political uncertainty currently facing the country, new research from Butterfield Mortgages Limited (BML) has found.

The prime property mortgage provider surveyed 1,100 UK-based investors, all of whom have assets in excess of £10,000, excluding pensions, savings, SIPPs and properties they live in.

The research revealed the most common assets investors hold are stocks and shares (53%), property (41%) and bonds (30%). On the other end of the spectrum, classic cars (16%), cryptocurrencies (17%), art and forex (both 19%) ranked as the least popular.

Delving into the factors influencing their investment decisions, 61% believe traditional assets like property are best positioned to deliver stable and secure returns during this current period of political uncertainty. One in five (20%) property investors are planning to invest in more real estate in 2020.

When it comes to non-traditional asset classes, nearly two thirds (64%) of investors surveyed by BML do not think cryptocurrencies are a safe or reliable investment. A tenth (10%) of those who have invested in cryptocurrency plan to reduce their amount of investment in this asset in the new year.

Looking into the factors influencing their financial plans for 2020, 43% of investors said they have become more socially and environmentally conscious and this will influence their financial strategy in 2020.

Brexit is also playing on investors’ minds. Two fifths (42%) are holding off making any major investment decisions until Brexit has been resolved, though half (49%) are confident in the long-term performance of UK-based assets. This compares to 23% of investors who are looking to assets based outside the UK for their investments in 2020 because of Brexit.

Alpa Bhakta, CEO of BML, said: “In this era of political uncertainty, investors are rallying towards traditional asset classes like property, which are historically resilient and able to hold their value in times of transition. The fact a significant proportion of investors are planning to increase investment into property in 2020 shows that despite Brexit, demand for real estate remains resoundingly strong.

“Interestingly, the factors influencing financial strategies are also changing–on top of security and stability, investors are also taking into account the environmental and social impact of their investments. This will evidently be an important trend over the coming years, and is something both financial services firms and advisers will need to pay attention to in 2020.”

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