A number of factors are boosting optimism for investors and business owners, and sustainable investing is losing none of its shine, latest UBS global polling shows.
Investors and business owners globally have grown more upbeat on the economy and equity markets, but a majority don’t expect a return to normality until at least after July, a new broad sentiment survey from UBS has revealed.
Eight in 10 respondents now expect sustainable investments to deliver returns that match or exceed their traditional counterparts.
Polling more than 4,000 investors and business owners across 14 markets in late December and January, the Swiss wealth manager found that 60 per cent have a positive outlook for the economy over the next 12 months, up from 55 per cent three months earlier, but two thirds don’t believe that life will return to anything like normal in the first half of the year.
Stock market optimism is also rising, up to 61 per cent from 55 per cent three months earlier, mostly based on vaccine progress and the potential impact of the US elections.
By region, Latin America investors were the most confident about their own economic recovery and had the highest expectations for sustainable investing outperforming traditional investing. Economic optimism across Asia was up by 7 per cent for the three months, where much of the recovery effort is centred. In UBS's home Swiss market, sentiment was pretty well unchanged for the quarter, with just over half reporting optimism about equity markets and the economy.
UBS surveyed 2,854 investors and 1,151 business owners with at least $1 million in investable assets (for investors) or at least $1 million in annual revenue (for businesses) across Argentina, Brazil, France, Germany, Hong Kong, Italy, Japan, Mainland China, Mexico, Singapore, Switzerland, the UAE, the UK, and the US.
Among US investors, national debt eclipsed COVID-19 as their top concern in the newest poll. Fifty-nine per cent thought that the US election results benefited the economy, against 31 per cent who thought that the incoming administration would hurt the economy.
Confidence is also on the rise among business owners globally, with three-quarters expressing more optimism for the 12-month outlook based on improving conditions, vaccine rollouts and favourable monetary policy, the survey found.
Businesses planning to hire rose by 2 per cent from three months earlier, with a third overall expecting to add headcount. Equally, those planning to downsize also rose by 2 per cent in the three-month period.
Sustainable investing not losing ground
More than half of the investors globally (54 per cent) said they are planning to increase their allocations in sustainable products; roughly half also believe that sustainable investing returns better yields relative to traditional investing; all regions reported a rising interest in sustainable investing.
“Three years ago we had around $1 billion invested in our 100 per cent sustainable portfolio for private clients. Today that figure is over $18 billion,” Iqbal Khan, co-president of UBS Global Wealth Management, said.
In September, UBS became the first major global financial institution to make sustainable investing its preferred solution for private clients.