UBS has released the results of its latest global Investor Sentiment survey, which polled 2,850 investors and 1,150 business owners with at least $1m in investable assets or annual revenue between 30 March and 18 April this year.
According to the survey, investors continue to hold elevated levels of cash in their portfolios but are considering allocating more to stocks.
Cash forms 22% of individual investors’ portfolios globally, declining just three percentage points since September 2020.
The high cash weightings contrast with positive market and economic developments over that time, including the rally in stocks, the rollout of vaccines and the improvement in economic indicators.
Stocks push
However, 41% of investors are thinking about boosting their exposure to stocks in the next six months, compared with 12% who intend to cut it and 47% who wish to keep their portfolios the same.
In particular, 70% of investors see technological transformation as a key theme over the next six months – 64% believe stocks are an effective way to diversify portfolios during the recovery, while 63% see sustainable investing as a promising opportunity.
Inflation worries
Half of investors are also 'very concerned', and 26% 'somewhat concerned', that cash will take a performance hit if inflation rises too much. Some 41% say they would increase their holdings of stocks in such a scenario and 31% say they would increase their real estate positions.
Iqbal Khan, President of UBS Europe, Middle East and Africa and Co-President of UBS Global Wealth Management, commented: “We are pleased to see investors citing sustainable and thematic investments among their top opportunities.
"As the market rally advances, we believe these areas will remain an important means of diversifying portfolios away from traditional stock and bond allocations.”