GCC’s wealthy individuals most actively involved in their portfolio, says Barclays Wealth Report
Barclays Wealth, a leading global wealth manager, has today (24May 2010) published a new report revealing wealthy investors’ attitudes towards the global economic outlook and prospects for investments in the years ahead. The study, titled ‘The Changing Wealth of Nations’– is a survey of trends, financial priorities, concerns, and economic expectations of High Net Worth Individuals (HNWIs) around the world. The survey, covering more than 20 countries, included more than 2,000 respondents.
After the most catastrophic economic downturn since the 1930s, Volume 11 sought to gauge the world’s HNWI’s forecast on wealth over the next 10 years. The report tells an interesting story about HNWI’s in the GCC and their investment attitudes and behaviour, priorities in socially responsible spending, as well as their outlook on specific asset classes in the medium term. These factors combine to create an optimistic outlook for positive economic growth globally as well as the GCC by the wealthy in Saudi Arabia, Qatar and the UAE.
GCC HNWIs - The Most Engaged Investors
There is a near universal consensus by GCC HNWIs on the importance of time spent on actively engaging with their financial manager in the construction of their investment portfolio. The notion of the wealthy as passive investors has become out of date and HNWIs, particularly in the Gulf states, are taking a more hands-on approach in managing their investments. 76 per cent of those surveyed in Saudi Arabia, 70% in Qatar and 90% of respondents in the UAE spend an increasing amount of time actively managing their portfolio compared to 73% of UAE investors spend more than 20 hours a week on managing their investments.
Soha Nashaat, Chief Executive of Barclays Wealth Middle East, said: “Investors in the GCC are some of the most savvy in the world, and this report shows why: HNWIs in the region spend more time reviewing and adjusting their portfolio. This engaged approach to their investments is a trend that is gaining global momentum and will ultimately help ensure that financial managers are understanding and meeting the needs of their clients.”
Doing well whilst doing good – An opportunity for investment
As further evidence of this proactive and engaged attitude, respondents in Saudi Arabia, Qatar and the UAE, are taking a more socially aware attitude towards their lifestyle and becoming increasingly more involved with their communities. These HNWIs rank in the top five globally in the time spent volunteering for charity; 47% of those surveyed in the UAE, 48% in Saudi Arabia and 47% in Qatar are giving money to charitable causes. Further, a majority of HNWI’s in the region [Qatar – 62%, Saudi Arabia – 78%, and the UAE – 43%] would only buy products that have been ethically sourced.
Commenting on this emerging trend in the region, Soha Nashaat continued: “We believe that the region’s wealthy will change their attitudes to wealth over the next decade, with an increasing role possible for socially-inspired wealth transfer. This will be reinforced by a growing number of young wealthy, more inclined to question the functioning and purpose of wealth investment. The increasingly number of wealthy women will also add to pressure for change, both in terms of information provision and their perceptions of desirable investment priorities.”
The responses also reveal climate change to be an important, if not an overwhelming issue. HNWI’s in Qatar (70%), Saudi Arabia (62%), and the UAE (38%) are increasingly concerned about climate change which is in line with global trends. Volume 11 reveals that 56% of HNWIs around the world are also concerned about climate change and 42% often encourage friends to buy more environmentally-friendly products.
Optimistic outlook for positive economic growth in the GCC and globally
Volume 11 of “Wealth Insights” revealed that the gloom about the global economy is by no means universal. HNWIs in the GCC countries surveyed are more optimistic on the performance of the global economy and their own local economies. HNWIs from Saudi Arabia (70%), Qatar (88.70%), and the UAE (81.20%) believe that the global economy will grow over the next few years with a minority considering that the growth will take place after a slight deterioration in the near term. Conversely, figures reveal that 60% of the aggregate of global HNWIs believe that the world economy will be stable or even deteriorate in the near future
This optimism can be linked to forecasts on various asset classes. Almost all HNWI’s in Saudi Arabia, Qatar and the UAE say that equity and property will increase in performance over a five year horizon. HNWI’s from the region have been quite certain about their outlook on various asset classes, with few surveyed responding ‘don’t know’ on questions relating to asset class performance.
In terms of real estate all HNWIs of Qatar (77%), UAE (77%), and Saudi Arabia (74%) believe that property will perform quite well over the coming five years. Furthermore, UAE (73%) and Saudi Arabia (78%) believe that equity in the medium term will outperform equities in the short term. In the meantime, the majority of HNWIs in Qatar believe that the performance of the equities market in the short term will match the medium term performance with only 32% considering that equities’ market performance will increase in the future.
Nashaat concluded, “The global survey reveals that HNWI’s enthusiasm for equities and property continues and will likely sustain over the next five years. A degree of investor caution remains after the downturn but wealthy individuals remain engaged with the markets, and demonstrate a considerable degree of self-reliance and composure. GCC HNWIs exert a more positive outlook than some of their global counterparts on the performance of the global economy as well as their own over the next five years.”