Inflation and interest rate increases are top of mind for high-net-worth investors around the world, according to UBS' quarterly investor sentiment survey, released Tuesday.
UBS conducted the survey in January among 3,000 investors with at least $1 million in investable assets and 1,200 business owners with at least $1 million in annual revenue and at least one employee other than themselves. The global sample was split across 15 markets.
Higher prices for goods, fuel and energy are worrying investors everywhere, with 54% expecting elevated inflation to last more than 12 months, and 62% among U.S. investors.
Despite waning optimism, 62% of global respondents expressed confidence in the stock market over the next six months. Many see an opportunity to borrow and make portfolio changes.
Two-thirds of investors reported that they hold more than 10% of their portfolio in cash; of those, about half said they are waiting for the right opportunity to invest. Sixty-three percent of those who do choose to invest see technology as an attractive sector, while 59% like health care.
"With the effects of COVID-19 expected to impact the healthcare industry for years to come and a shift to a more digitalized world, investors see further opportunities in these sectors," Iqbal Khan, president of UBS Europe, Middle East and Africa and co-president of UBS Global Wealth Management, said in a statement.
"However, given high levels of inflation and interest rate hikes on the horizon, investors are waiting for the right moment to put their money to work."
Seventy-eight percent of business owners surveyed said they remain confident in their businesses over the next 12 months, despite citing the pandemic, rising material costs and business tax increases as sources of concern.
Forty-four percent reported that they are also looking to hire, and 48% said they are interested in investing more in their business.
The survey found that businesses are changing their traditional operating models to meet employee demands. Sixty-nine percent are offering increased flexibility in working hours, and 67% are offering increased flexibility in where their employees can work.
"The pandemic and the 'Great Resignation' that followed encouraged business owners to adapt to the current environment and change their perspective on flexibility in the workplace," Tom Naratil, president of UBS Americas and co-president of UBS Global Wealth Management, said in the statement.
Regional Findings
U.S.
