Investors want stuff they can touch; cash and resi property are king

Consumers prefer to invest in assets that they “can physically touch,” according to research from Paxton Private Finance. The lender’s stats show that 39% of consumers are most confident about investing in cash, whilst residential property and private pensions both  pulled in 31% of respondents.

GentlemanMore intangible assets are, according to the research, significantly less trusted, with commodities at 5%, and equities and fixed-income bonds at 4%.

9% of the over-60s who responded were most interested in equity investments, but were significantly less keen on private pensions than younger investors (12% over 60 compared to 36% under 60). Over 60s also showed more faith residential property.

Tangibility came out on top of reasons to trust an investment, with 28% of investors placing it at the top of their pros list, whilst just 20% put long-term performance in the top spot.  14% said they were looking to invest in “something they understand,” whilst 12% are after a multi-purpose asset that gives eg. tax efficiency as well as returns.

46% of the quizzed investors said that they will be investing in cash this year; 23% said residential property, and 12% will be going for equities.

Nick McLean, partner at Paxton Private Finance: “With the current economic uncertainty consumers are looking for assets that they feel they can trust – be it due to long-term performance or the ability to physically see what they are investing in.  As we head towards the end of the tax year, this suggests that we will see an increase in interest from SIPP and ISA investors in funds with these attributes.

“This research also suggests that advisers and providers need to keep communicating the benefits of portfolio diversification to their retail investors. While some asset classes may not have performed as well recently, it is vital that the emphasis is on long-term rather than short-term gains.

“While high-net worth and sophisticated investors have more disposable income to invest, we have found that they still have some of the same concerns about their portfolios.  The Paxton Secured Income Fund provides them with the opportunity to participate in a UK property related investment, secure in the knowledge that strict risk management criteria are in place.”