Over the next twelve months, affluent and high net worth individuals in the UK are likely to invest in more niche products than mainstream ones, a report by Phoenix Global Wealth Monitor claims. These particular asset classes include non-residential property, exchange-traded funds, offshore investments and hedge funds.

The group carried out a survey of 663 individuals and looked at which sectors that those not currently invested in would like to take up, compared to people who were already invested. Phoenix GWM arranged their findings in a scale from “hot” – defined by assets in which non-holders most want to hold – to “cold” – those assets most out of favour.

“The value of the Product Heat Index lies in telling clients what is going to be ‘hot’, according to peers with holdings just like them, and can be used as a barometer. A major benefit is planning ahead for new products, to bring something fresh and relevant to clients,” Ian McKechnie, senior vice president for sales and marketing in Europe, told this publication.

“The index means customers can reconsider and recommend asset classes that may have fallen out of favour or become undervalued in recent times. It may provide an opportunity to re-market existing but dormant financial products that cater for these desirable new investment sectors. It also gives any advisor some rich talking points with clients about asset classes they may not have thought of,” said McKechnie.

The “hottest” sector to come out top was the more niche category of undeveloped land that scored a rating of 42, indicating that the number of non-owners likely to invest in this product in the next year represents 42 per cent of the current holder base. For each category, the likely market entrants comprised new investors as well as returning ones.

Next on the “hot” end of investments was commercial property, with non-owners likely to invest representing 39 per cent of existing holders. Other categories with high “heat” ratings included, in descending order, exchange-traded funds (33), offshore investments (32), hedge funds (31) and self-employed pensions (30), the index showed.

The data also suggests that more mainstream products, such as accounts and shares and stocks, were being left out in the cold. The least popular category to invest in was current accounts, with a measly rating of 1, as was savings accounts. Cash ISAs, stocks and shares and primary residence were also ‘cold’ categories with a rating of 4, 3 and 2 respectively.

Phoenix GWM said that its findings do not necessarily mean there will not be significant inflows to these “colder” products, but that new customers coming to them will only represent a small proportion of the current holder bases.