Income-producing investment products are returning almost 3 per cent less per annum than what is currently anticipated by Australian investors, according to new figures from Legg Mason.
The 200 Australian investors surveyed hoped for an average income return of 8.4 per cent per annum from their income investments; however, respondents reported their actual return was 5.7 per cent on average, the fund manager stated.
Legg Mason head of global marketing Matt Schiffman said the 2.7 per cent ‘reality gap' was "significant in the current environment".
"Close to four in 10 indicated they do not have a good understanding of the income-producing products available to them and 85 per cent of investors want their adviser to bring them more income opportunities," he said.
According to the survey, 69 per cent of Australian investors said income was important or extremely important to them, up from 60 per cent five years ago, when more respondents said it was somewhat more important or much more important to their investment needs.
Of the 13 countries surveyed, Australians have the second-highest holdings of real estate (27 per cent) and the second-lowest proportion of equities in their overall investment allocation.
Australian investors were also among the least likely to invest in income internationally (58 per cent) due to concerns about global uncertainty and levels of risk involved, the survey found.
Of the 3028 investors surveyed across the globe, only 54 per cent were prepared to take on more risk to make up the 2.8 per cent shortfall in their annual investment return.
Despite this, Asian investors took out the top three positions for willingness to take on more risk for a higher yield, specifically China (77 per cent), Singapore (73 per cent) and Hong Kong (63 per cent).
