Schroders Global Investor Study 2023: UK savers forced to reconsider their investment strategies amid inflation and geopolitical uncertainty
Rising interest rates are forcing UK investors to turn to cash, amid rising uncertainties caused by inflation and geopolitics, the Schroders Global Investor Study 2023 has found.
The percentage of investors holding cash is now on a par with those holding actively-managed investment/mutual funds, and some distance ahead of non-actively managed investments, as well as private investments – 40% and 14% respectively.
The Schroders’ flagship study, which surveyed over 23,000 people who invest from 33 locations globally, also identified that UK investors’ have significant return expectations, in spite of current as well as expected interest rates in the foreseeable future.
The study found that the minimum level of income/return UK investors would like to receive was:
The Study also provided further insights into the various options being explored by UK investors in order to achieve their expected returns. These included:
The survey also found that a majority of UK investors (79%) believed that we are witnessing a new regime of market and policy behaviour, with (86%) also changing their investment strategy as a result of rising inflation and elevated interest rates.
Doug Abbott, Head of Wealth UK Client Group, said:
“The regime shift in inflation and rates is impacting how investors think about their portfolios, with many clearly allocating to cash investments as a result. However, with investors expecting to achieve returns of 10.5% per annum over the next five years, it is clear they will need to allocate their portfolios to a range of asset classes to achieve their objectives. The long-term structural trends of demographics, de-globalisation and de-carbonisation all point to inflation remaining higher than it has been for the last decade and long-term investing will be critical.”
Johanna Kyrklund, Schroders’ Group CIO and Co-Head of Investment, said:
“In an investment landscape being increasingly shaped by the ‘3Ds’ of deglobalisation, decarbonisation and demographics, investors are still getting used to the fact that higher inflation and higher interest rates are here to stay. Every asset has had to reprice to compete with a yield on cash in the bank. Valuation matters once again. Compared to the last 15 years, you may now need to be more flexible and active in the way you invest. The results of the study show that some investors are adjusting quicker than others.”
Global findings
From a global perspective, our study also highlights the importance of active fund management for many investors, while private assets were recognised as an essential diversifying tool with the democratisation trend continuing to gather pace.
Importantly, more than a third of investors (34%) from across the 33 locations we surveyed said that sustainable funds are likely to offer higher returns. Furthermore, the proportion of investors globally shunning sustainable investing due to performance concerns has fallen by half compared with last year’s survey.
A key element of sustainable investing is active ownership - engaging with companies directly to improve business outcomes with the ultimate aim of supporting investment returns. The vast majority of people (83%) recognise and support the concept of active ownership, with this view growing in strength among the more experienced investors.
For much information about the Global Investor Study and to view the full report and findings in more detail, please click here.
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For further information, please contact:
Gus Chipungu, Media Relations Manager Kirsty Preston, Media Relations Executive | +44 20 7658 2106 +44 20 7658 1961 | Augustine.Chipungu@schroders.com |
Note to Editors
Between 26 May and 31 July 2023, Schroders commissioned an independent online survey of over 23,000 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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