The world’s high net worth individuals are starkly divided over the prospects for a global recovery, with different geographies showing marked differences in their confidence for growth, a new study by Barclays Wealth reveals.

Having surveyed over 2,000 HNW individuals across the world, Barclays Wealth found that those in the GCC (Gulf Co-operation Council) countries were particularly confident of a global recovery, with 33 per cent saying that they expect the economy to grow in the coming few years. Participants in Europe and the US were however far more pessimistic, with 19 and 13 per cent respectively forecasting growth in the short to medium term.

Breaking down the responses on a country-by-country basis, the contrasts revealed by the study were even more striking. HNW individuals in Monaco were found to be the most pessimistic - 52 per cent of respondents from the principality predicting the global economy will deteriorate in the next five years.  Japan took the second spot for the greatest pessimism at 35 per cent, followed by the US (25 per cent), Switzerland (17 per cent) and the UK (16 per cent).

By way of contrast, the top optimists were Spain (40 per cent), Qatar (34 per cent), Saudi Arabia (32 per cent), Ireland (26 per cent) and India (26 per cent).

“There is a great divergence of opinion on what the next decade will bring for the global economy. The global outlook of wealthy individuals is heavily tainted by experiences in their local markets,” David Semaya, head of UK and Ireland Private Bank at Barclays Wealth, said.

“While there are grounds for optimism in some local economies, in the UK the outlook among wealthy investors is cautiously pessimistic. Uncertainty over the UK’s budget deficit, and an indeterminate political outlook have left some investors feeling wary.” 

As might be expected after the cataclysmic events of the financial crisis, the study revealed widespread caution among investors: 51 per cent of those surveyed said they are avoiding what are perceived as high risk investments more than before the economic crisis.

The study’s authors also found that the wealthy reported an enduring attachment to equities and property, relative to other asset classes. Nearly half (47 per cent) of those surveyed said they think equities will perform well over the coming year, while 50 per cent pegged property as a good investment option for the next twelve months.

The popularity of equities and property comes hand in hand with a decline in interest in other forms of investment. Only a third of respondents said they expect hedge funds or alternative investments such as wine or art to do well in the next year. But, as might be expected amid concerns over governments’ huge deficits, government bonds were the least popular, with only 21 per cent predicting that they will offer positive returns in the next twelve months.

“Uncertainty around the prospects and timing of the global economic recovery is a major factor behind investors choosing the familiar asset classes of equities and property.  Wealthy investors in the UK share the global view in attaching trust to ‘traditional’ forms of investments,” Semaya said.

“The current economic and political climate in the UK is casting a cloud of doubt over many aspects of business and investment life, and in times of uncertainty the familiar often seems ‘safe’.  However, Barclays Wealth has continuously urged investors to ensure they do not concentrate their portfolio too narrowly in any market environment.”