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Schroders Global Investor Study 2019: Three-quarters of UK investors unsettled by political uncertainty and volatile markets

02/07/2019

Almost three-quarters of UK investors admit that political uncertainty and volatile markets have impacted their investment decision-making, Schroders Global Investor Study 2019* has found.

Some 73% of UK investors conceded that political and market events out of their control affect their investment behaviours, slightly higher than the European (69%) and global (72%) averages.

Schroders’ Global Investor Study surveyed over 25,000 people in 32 countries, including 1,200 in the UK. The study results come as the UK finds itself in the midst of significant political uncertainty and shortly after global markets experienced falls during 2018.

Just under a fifth of UK investors (18%) stated that an unsettled political situation and volatile markets were preventing them from making investment decisions, until events had settled down. Interestingly 21% admitted that they viewed this uncertainty as an investment opportunity.

In total however, investors in the UK were less reactive to the instability than their global counterparts. Almost two-thirds (65%) of UK investors admitted to changing the risk profiles of their portfolios in direct reaction to market instability, compared to 70% of investors globally.

Investors in the UK are also less likely to be swayed when it comes to how long they hold onto their investments. The average UK investment horizon is 2.9 years, compared to the 2.6 years global average, although this is still considerably lower than the recommended five years.

UK investors were comparatively more bullish than bearish in the face of market volatility. They are more likely to increase (39%) than decrease (31%) the overall risk profile of their investments.

The survey also found that over the next five years UK investors have unrealistic return expectations, hoping to make an average return of 9.9%. This might be why almost half of investors in the UK (48%) felt that they hadn’t achieved their investment objectives over the past five years. UK investors are however more realistic than global investors who, on average, are hopeful of returns of 10.7%.

Global return expectations:

Investors in the UK are also more likely to be more diversified than their global counterparts. Almost a third (32%) believe investing in emerging markets could be beneficial to their portfolios.

Phil Middleton, Head of UK Intermediary Business at Schroders, said:

“Given the level of political uncertainty currently in the UK, it is perhaps not surprising that UK investors seem particularly sensitive to events that are out of their control. At the same time it is important that investors are not to be swayed by short-term noise and instead focus on their long-term investment goals.

“When it comes to investment returns, we have also seen that investors in the UK still have unrealistic return expectations. This perhaps explains why almost half felt they hadn’t met their investment objectives over the past five years. A focus on the long-term and a lowering of their investment expectations is likely to stand UK investors in better stead towards meeting their investment goals going forwards.”

 

*In April 2019, Schroders commissioned Research Plus Ltd to conduct an independent online survey of 25,743 people who invest from 32 countries around the globe. The countries included Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, the Netherlands, Spain, the UK and the US. 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.

 

For further information, please contact:

Estelle Bibby, Head of Media Relations +44 20 7658 3431/Estelle.Bibby@Schroders.com

Andy Pearce, PR Manager  +44 20 7658 2203/Andy.Pearce@Schroders.com

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