§ Over one in 10 investors (11%) polled would invest because the product is more exciting than traditional investments
§ 12% turned to alternatives because of the product’s ethical and green credentials
§ 9% would invest in alternatives solely to pass something physical onto a future generation
§ Overwhelming majority (87%) who have already invested in an alternative would do so again
Traditional investment products don’t offer the same level of excitement to many investors as alternatives do, according to the Avacade Investment’s (Avacade) Alternative Investment Index (AII). The Warrington-based investment provider discovered an engaged, passionate investor, with more than one in five (21%) proclaiming they would invest in an alternative solely because of a personal interest in the product.
When looking at the factors to have already influenced an investor’s decision on whether to invest in an alternative, more than one in 10 (12%) stated whether it was green or ethical as being of significant importance – the third most important reason given. 42% – the highest percentage of all the options given – of those questioned said that projected financial returns were important and 14% stated that being able to access the money at any time was incredibly important.
The AII also looked at the elements that attract investors to alternatives in the future. Once again, the opportunity for higher returns (38%) was the main reason as to why an investor would pick an alternative. However, more than one in 10 (11%) would do so because the product is more exciting than a traditional one, over one in five (21%) proclaimed it was because of a personal interest or passion for one of the assets, and nearly a tenth (9%) wanted to invest in an alternative solely so they can pass something physical onto a future generation.
The AII investigated the attitudes, actions and intentions towards a collection of the most popular alternative investment products. Interestingly, the study unveiled that nearly one in ten investors (7%) turned to wine in the last year, making it the fourth most popular alternative polled, behind real estate (38%), gold (20%) and land (11%). Avacade’s study also looked at the outlook for each of the assets polled, with investor intentions canvassed for the year ahead. Intriguingly, the asset class with the biggest increase in investor interest was that of shipping containers – which saw an increase of 5% from previous levels of investment. The table below outlines the AII asset performance.
AII Asset Performance
|Asset||% To invest in previous 12 months||% Intending to invest in next 12 months||Investor interest, up/ down/ remain|
|Industrial Metals (i.e. copper)||3%||4%||Up|
|Real Estate/ Property||38%||43%||Up|
The Avacade Investments research looked at a broad range of investors. Although the largest section of the sample (23%) had a portfolio of over £200,000, well over one in 10 (13%) also had a portfolio of between £1,000 and £5,000. Nearly one in five (18%) to have self-invested was female, over half (51%) were at least 45, but more than one in 10 (12%) was aged between 25 and 34. Perhaps most revealingly, across this broad sample, an impressive 87% of investors to have invested in an alternative would do so again.
Lee Lummis, Operations Director, Avacade Investments, said: “We were fascinated to discover such a personally involved and engaged investor when looking at alternatives. The financial returns are obviously of significant interest, however just how many were choosing an alternative because of its green credentials is incredibly promising. The study tracks investor interest in a number of different assets, and we are extremely interested to see how this interest develops and changes in the coming years ”
To read the full AII report, please download it here: http://www.avacadeinvestments.