In an uncertain global economic environment, ultra wealthy investors are seeking more international advice. Learn more about the trend.
The majority of ultra wealthy investors are worried about the European debt crisis and slowing growth in China, according to a recent Millionaire Corner report on the investment preferences of households with a net worth exceeding $25 million.
In such an uncertain global economic environment, these affluent investors are seeking more international investment advice, according to our $25 Million Plus Investor 2012 published in September. Nearly one-fourth of the ultra wealthy is working with an advisor based outside the United States, nearly doubling the share who worked with a foreign financial professional in 2010. Among investors with $125 million or more, the share rises to 40 percent.
A high level of concern about the global economy accompanies this increased reliance on advisors investing outside the United States. Nearly 70 percent of $25 Million Plus investors indicate they are worried about the European debt crisis, and the concern is even higher among ultra wealthy investors ages 56 and older. Close to 60 percent expresses concern about slowing growth in China.
Amid these concerns, ultra wealthy investors have reduced their exposure to foreign and international mutual funds. The share who invests in these products has fallen from 61 percent in 2010 to 44 percent this year. The average value of these funds has also dropped from roughly $3.9 million to $2.3 million.
As a group, ultra wealthy investors see less opportunity in China than they did two years ago. In 2010, nearly one-third of $25 Million Plus investors identified China as the nation with the most investment potential. India ranked second (15 percent) and Brazil, third (14 percent). Less than one-fourth of ultra wealthy investors currently see China as having the most potential for investment. Interest in India and Brazil is also on the decline. Eight percent of ultra wealthy investors identify India and 11 percent, Brazil as the nation’s having the most investment potential.