Surveys

HNW Investors Turn More Optimistic, Eye US Elections - UBS Survey

Tom Burroughes, Group Editor, 23 July 2020

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The global poll reveals how the upcoming US election is starting to affect how wealthy investors are adjusting their portfolios. The results also show a difference in optimism levels depending on where they are from.

A UBS study of more than 4,000 high net worth investors and business owners globally has found that they plan to adjust their portfolios based on who wins the US election, with almost half seeing November’s vote as one of their top concerns.

Almost half (46 per cent) said they were optimistic on the global economy over the next 12 months, up from 40 per cent three months prior; 38 per cent were pessimistic, down from 45 per cent; and 52 per cent said they were optimistic on their own region’s economy over the next 12 months, up from 46 per cent. And 53 per cent said they were optimistic about stocks in their own region over the next six months, up from 45 per cent.

The findings came from the new Investor Sentiment study by UBS. 

“COVID-19 remains the top investor concern globally, yet there is significant divergence by region on the focus of post-recovery plans. While more Asians and Europeans see an opportunity for a ‘green’ recovery, US investors place more importance on a traditional economic turnaround,” Paula Polito, divisional vice-chairman at UBS Global Wealth Management, said. 

Solita Marcelli, chief investment officer Americas, said: “The US election will likely present numerous opportunities for investors, as well as some clarity over policy direction in the world’s largest economy. Regardless of the result, the eventual impact on financial markets is likely to be close to neutral, even if they experience some interim volatility.“

Some 55 per cent of respondents said that Joe Biden was most likely to win the election, compared with 45 per cent who said Donald Trump would retain the White House. Some 49 per cent of Latin American investors foresaw a Trump victory, the highest proportion globally, while 42 per cent of Swiss investors predicted a Trump win, the lowest share in any region.

Asian investors were most likely to say that they would adjust their portfolio based on who wins, with 75 per cent of respondents saying that they were planning to do so versus a global average of 61 per cent. Swiss investors were least likely, with only 31 per cent of respondents saying they were planning to do so.

Americas
American respondents’ optimism over their region’s economic outlook increased more than in any other part of the world, with 41 per cent expressing optimism compared with 30 per cent three months prior.

They were also less likely to say that they would adjust their portfolios based on who wins the election, with 46 per cent planning to do so compared with a global average of 61 per cent. UBS’s ElectionWatch report predicts that tactical adjustments are only likely to become a more important consideration in September as the campaign enters its latter stages.

Latin American respondents’ optimism over their region’s stock market outlook rose faster than in other parts of the world, with 57 per cent expressing optimism compared with 47 per cent three months earlier. They were also more likely to say that they would adjust their portfolios based on who wins the US election, with 67 per cent planning to do so.

Europe
European respondents outside Switzerland were more optimistic on their region’s economy over the next 12 months than the global average. Some 55 per cent said they were optimistic versus 52 per cent globally. They also expressed more interest in the US election than any other region outside the US, with 72 per cent highly interested compared with a global average of 67 per cent. 

Asia
Asian investors were the most optimistic globally on their region’s economy over the next 12 months and on their own region’s stock market over the next six months, with 60 per cent expressing optimism on both compared with global averages of 52 per cent and 53 per cent, respectively. They were also most likely to say that they would adjust their portfolios based on who wins the US election, with 75 per cent planning to do so versus 61 per cent globally. 

The bank surveyed 2,867 investors and 1,151 business owners with at least $1 million in investable assets (for investors) or at least $1 million in annual revenue and at least one employee other than themselves (for business owners), from 23 June to 13 July 2020.

The global sample was split across 14 markets: Argentina, Brazil, mainland China, France, Germany, Hong Kong, Italy, Japan, Mexico, Singapore, Switzerland, the UAE, the UK and the US.

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