Despite “general bad feeling” about the global economy, expat retail investors have kept their confidence in international markets, with over half sticking to equities for both income and growth, according to a new survey.

Although over half (52 per cent) of expat investors expect the global economy to fall back into recession in 2012, they remain confident in equities as their preferred investment choice for both income (44 per cent) and growth (41 per cent), according to the Canadian bank TD's Global Investor Confidence survey.

In terms of international markets, the survey shows a “real shift” in European confidence, with just 5 per cent of expat respondents expecting Europe to finish up as the best-performing market this year.

Positivity further afield 

While this shift illustrates a significant decline in confidence in the European markets, elsewhere confidence is more positive, the firm said. Specifically, Asia remains the most popular market among 46 per cent of expat investors, followed by the US and Australia (18 and 8 per cent respectively).

“Recent economic turmoil in Greece, Italy, Spain and Ireland will no doubt have placed a heavy burden on both expat and UK investors, demonstrating that now more than ever it is important they have the opportunity to seek out opportunities in international equity markets,” said Annemarie Jung, chief executive of Luxembourg’s Internaxx Bank, a TD firm which services international and expat investors.

Expats chose equities as their top investment choice for 2012, but they also demonstrated a high level of interest for hard assets, with a combined 39 per cent saying they would choose to invest in real estate, commodities and precious metals in 2012, compared to 26 per cent of their UK counterparts. Notably, 20 per cent of expats would invest in gold and precious metals, compared to 12 per cent of UK respondents.

When asked where they kept their assets, over half (58 per cent) of expat investors said that they held some or all of their assets offshore, while 48 per cent said they principally use the services of an execution-only broker.

Over 2,000 expat and UK investors were questioned for the survey.