More than half of respondents in a new global survey prefer to invest in their home country despite the fact that many of them see better investment returns elsewhere.

A poll by US-listed Franklin Templeton found that 56 per cent of respondents would invest in their home country when given only one choice, but only 37 per cent believe that their domestic market will offer the best returns. The survey included about 20,000 private individuals in 19 countries.

The findings are down to two main factors, according to Professor Dan Ariely of Duke University: “The first is an overly optimistic belief about one’s own economy,” he said. “The survey shows us that respondents in almost every country had an expectation of performance in their country that is higher than what would be statistically realistic.

“The second reason is most likely due to procedural difficulties in investing outside the country, such as less knowledge about how to access these markets, not having recommendations for such products and of course having fewer products available,” said Professor Ariely.

The survey also found that four out of five of respondents expect equity returns of at least 5 per cent this year and half of those surveyed believe in similar annual returns over the next 10 years. At the same time, only one in five of respondents are looking to make their portfolios more aggressive this year.

The survey reflected regional differences: between 50 and 57 per cent of people in France, Belgium and Italy intend to take a more conservative approach, compared with 44 per cent in the UK and 41 per cent in Germany.

“It is clear from the survey that investors in the UK and Germany have a different view to the rest of Europe,” said Jamie Hammond, managing director of Europe at Franklin Templeton Investments. “Investors surveyed in the UK and Germany show more confidence in their home economies, and both think that their respective home economies will offer better returns than Asia next year. This survey provides interesting insights into investors’ needs, risk appetite and where they see growth potential.”

The countries represented in the Franklin Templeton Global Investor Sentiment Survey included Brazil, Chile, Mexico, Canada and the US in the Americas; Australia, China, Japan, Hong Kong, India, Malaysia, South Korea and Singapore in Asia-Pacific; and Belgium, France, Germany, Italy, Poland and the UK in Europe.