According to a recent study by Barclays Wealth, 100% of Qatari HNWIs indicated that they are currently invested in the real estate sector. Qatari respondents who participated in the survey expressed a positive outlook for the real estate sector with another 100% stating that real estate would be a safe investment over the next 12 months.
The report, Risk and Rules: The Role of Control in Financial Decision Making, is based on a global survey of more than 2,000 HNWIs, and provides an in-depth examination of wealthy investors from a behavioural finance perspective. In addition to considering the different financial personality traits that exist amongst wealthy investors, the report shows their views on nine main asset groups: real estate; cash; alternative strategies (long/short funds, arbitrage etc); equities from both developed and emerging markets; bonds from developed governments, blue-chip corporations and high yield/emerging markets; and commodities.
Forty three percent (43%) of Qatari investors believe that investment in cash is risky, while 24% see cash as safe. Less than a third (32%) of those surveyed currently hold cash investments. Qatari HNWIs also demonstrated ambiguous sentiments towards investment in alternative strategies. Nearly half (42%) believe they are neither risky nor safe, 15.7% perceive them to be risky while 37% take the complete opposite view and think they are safe. Regardless of their views on the safety or riskiness of this asset class, alternative strategies were not particularly popular with Qatari HNWIs and only 16% have such investments in their portfolio.
Equities further highlight mixed investment opinions among Qatari investors - 39% of respondents find investments in emerging market equities risky, yet almost exactly the same proportion (35%) find them safe. There is however a greater difference when it comes to developed market equities, as a clear majority (62.7%) of respondents considers them a safe investment option for their portfolio.
Investments in developed government bonds are considered safe by over half of the investors (55%). Corporate and investment grade bonds are also considered safe by 53% of those surveyed, while only 10% view them as risky. High yield and emerging market bonds are considered safe by a much lower proportion of investors (33%).
With no respondents viewing commodities as very risky and less than 14% of them seeing this asset class as quite risky, Qatari investors show more confidence in commodities than any other markets in the world. Qatari investors do not see commodities as particularly riskier than the average risk carried by all asset classes. 43% of investors have commodities in their portfolio, making them the second most popular asset class after real estate, the country’s favored investment.
Khurram Jafree, Head of Investment Advisory, Barclays Wealth MENA, says: “Qatari investors distinguish themselves among their peers by their enthusiasm for investments in real estate. This strategy must have rewarded them as they show the greatest contentment with their financial situation. As the report clearly illustrates, there are considerable differences among wealthy investors in Qatar and between Qatari investors and their counterparts in the region and the world. This is a timely reminder, if one was needed, that the wealth management industry needs to tailor its services at the individual level and that one-size fits-all approaches do not work. The considerable amount of data and insights in the report will allow Barclays Wealth to remain at the forefront of the wealth management sector and further capitalize on our extensive experience in dealing with high net worth individuals, in Qatar, in the Middle East and the world.”