June 27, 2022 - NEW YORK - Investors globally are focused on allocating to funds that meet their personal needs and principles, Schroders Global Investor Study 2022 has found.
Schroders’ flagship study surveyed over 23,000 people who invest from 33 locations globally. Interestingly, the study found that younger investors in the U.S. are more likely to prioritize values and principles when evaluating funds to invest in, as investors aged 18 – 50 ranked its importance higher than those aged 51 – 71+. In Canada however, 76% of investors aged 71+ believed it to be more important that the funds they invest in are tailored to their values, perhaps indicating that older investors based in Canada have conviction in their current investment views.
The results also show that in North America, knowledgeable investors feel considerably more empowered to influence corporate decision making in the companies they are invested in as opposed to beginner investors, as 84% of people in the U.S. who classify themselves as advanced or expert investors feel empowered, and only 25% of those with beginner or rudimentary knowledge do. In Canada, as little as 16% of beginner investors feel confident in influencing corporate decision making.
In addition, the results show that people feel overwhelmingly that as shareholders they should have the power to influence the companies they are invested in. This applies across the investment knowledge spectrum; from those who classify themselves as having a ‘beginner’ level of investment knowledge, through to the ‘experts’. A formidable 95% of ‘expert/advanced’ investors in North America believe they should be empowered to do so, as well as 59% of ‘beginners’ in the U.S. and 69% in Canada.
Knowledge is power
Despite the positive intentions, a gap remains in terms of investors who feel genuinely empowered to make the right investment decisions for their future. Some 87% of ‘expert/advanced’ investors in the U.S. feel they have sufficient knowledge to feel confident in making investment decisions for their financial future, while only 28% of ‘beginner/rudimentary’ investors’ feel knowledgeable enough to do so.
This highlights the need for better financial education and the role financial providers have to play, especially in North America. Over half (52% in the U.S. and 56% in Canada) believe that investment companies should be responsible for ensuring that people have sufficient levels of knowledge on personal financial matters, and over 40% think it should be the responsibility of financial advisers.
Significantly though, more than half of respondents in Canada (53%) and 43% in the U.S. believe that educational institutions have a role to play in educating people about financial matters, while 32% view this as their personal responsibility.
Greater knowledge also driving private asset focus among retail investors
Furthermore, the Study indicates that people now feel more confident in accessing investments that might previously have been seen as off-limits, as investors are showing interest in a diverse range of private assets, with 61% of U.S. investors wanting to invest in private equity, closely followed by real estate (58%) and physical assets (54%).
In short, the greater the level of perceived investment knowledge, the more likely people are to be interested in investing in private asset classes. For example, our global study findings revealed that one third of ‘beginners’ feel infrastructure is beyond their grasp compared with 11% of ‘expert’ investors. This suggests the trend towards the democratization of private assets is likely to be linked to greater levels of financial literacy.
Tiffani Potesta, Chief Strategy Officer at Schroders North America said:
“The findings of this year’s Study reinforce that investors of all levels are increasingly focused on societal and governance risks, and feel empowered to influence positive change on the companies they are invested in. As people continue to gain confidence in their investment knowledge, they’re prioritizing investments that are tailored to their personal values and principles - at Schroders, we are dedicated to supporting our clients in finding the best investment solutions which meet their needs while ensuring they have access to the right tools and guidance to make their decisions.”
For more information about the Schroders Global Investor Study 2022 and to view the full report and findings in more detail, please click here.
For further information, please contact :
Chaneigh Bernard, Prosek Partners
Note to Editors
Between 18 February and 7 April 2022, Schroders commissioned an independent online survey of over 23,950 people who invest from 33 locations around the globe. This spanned countries across Europe, Asia, the Americas and more. This research defines people as those who will be investing at least €10,000 (or the equivalent) in the next 12 months and who have made changes to their investments within the last 10 years. Due to this threshold, Schroders acknowledges that this group and therefore the research findings are not representative of everyone’s experience.
Note: Figures in this document may not add up to 100 per cent due to rounding and multi-select options.
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