Ultra high net worth investors are bullish on equity markets, according to the annual family performance tracking survey by the Institute for Private Investors, a membership organization for wealthy individuals.

The survey revealed that 63 per cent of respondents said they plan to increase their allocation to global equities in 2013 and 53 per cent plan to increase positions in domestic equities.     

Ultra-affluent families also said they are again focused on growth versus merely preserving capital, while 51 per cent of survey respondents said growth was their primary objective in 2013, up from 47 per cent in last year’s survey. Last year, 43 per cent of respondents said that principal protection was their primary objective versus 36 per cent this year, and 10 per cent said income was their objective compared to 13 per cent this year.

Now, in its 14th year, the IPI family performance tracking survey highlights the expectations, returns and asset allocations of IPI member families. IPI member families have minimum assets of $30 million, and four in ten families have assets of $200 million or more. The IPI survey, which was conducted via member questionnaires in the second quarter of 2013, collected responses from 69 families.

“This year’s survey shows that the emotional climate of ultra-affluent investors is marked by a feeling that the time is right to get off the side lines and start focusing on rebuilding wealth lost in the great recession. Private investors are still highly concerned about preserving capital, but they realize to preserve wealth they need to generate returns,” said Mindy Rosenthal, IPI president. 

The survey showed that IPI members posted strong positive returns for 2012, reversing the downward trend seen in 2009. The average return net of fees was 10.08 per cent in 2012, up from 0.58 per cent in 2011. All respondents posted positive returns in 2012, ranging from 1.5 to 23.2 per cent, compared to returns ranging from -10 to +25 per cent in 2011.

In terms of average 2012 portfolio allocation, domestic equities accounted for 18 per cent. After this was: global equities, 14 per cent; taxable bonds, 10 per cent; municipals, 7 per cent; hedge funds and/or funds of funds, 18 per cent; private equity, 10 per cent, real estate direct investment, 6 per cent; commodities, 5 per cent; venture capital, 2 per cent; direct investments in private companies, 2 per cent; and other, 1 per cent.

In other findings, fixed income and cash allocations are decreasing, the survey findings show, with 42 per cent of respondents saying that they plan to decrease cash allocations in 2013. While 37 per cent said they plan to decrease allocations to municipal bonds, 44 per cent said they would decrease allocations to taxable bonds.

Last year, respondents reported that they planned to decrease municipal bond and cash holdings and increase taxable fixed income, all of which they did in 2012, the firm said.