High net worth investor numbers grow by nearly 10 per cent
High net worth (HNW) investor numbers have climbed by nearly 10 per cent in 12 months and have invested a third of their collective $1.39 trillion in assets via self-managed superannuation funds (SMSF).
At the same time, for the first time in four years they have shifted their investment focus away from defensive assets towards direct shares, exchange traded funds (ETF) and hybrid securities.
Investment Trends, in its most recent High Net Worth Investor Report released yesterday, stated the number of HNW investors increased by 8 per cent from 370,000 in 2012 to 400,000 in 2013, with HNW investors considered as those with more than $1 million in investable assets outside of their home, business or superannuation.
Investment Trends included SMSFs as an investable asset for HNW investors and found that $430 billion, or 31 per cent of HNW investors' collective assets, were invested via an SMSF.
Investment Trends senior analyst Uwe Helmes said HNW investors were ahead of the curve in their investing habits, with a quarter beginning to move out of cash and into equities while the general population continued to accumulate cash reserves during 2013.
HNW investors also began to move away from defensive assets in the last 12 months, according to Helmes, with assets invested in cash and term deposits shifting to direct shares for the first time since 2009.
Cash and term deposit allocations fell from 20 per cent to 16 per cent while direct shares allocations increased from 26 per cent to 32 per cent, boosted by a rise in the average amount invested.
Hybrid securities and ETFs usage also increased, with 23 per cent of HNW investors using hybrid securities in 2013, up from 21 per cent in 2012 and 9 per cent in 2009. ETF usage increased to 13 per cent of HNW investors from 5 per cent in 2009.
Investment Trends stated that its research was based on a survey of 2459 HNW investors with $1 million to $70 million in gross investable assets excluding their superannuation, primary residence and own business, but including their SMSF investments.
The survey group included 100 ultra-HNW investors with more than $10 million of investable assets, and the whole group holds collective assets of $8 billion.
AUTHOR
Jason Spits
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