As 2014 ended, the vast majority of High Net Worth Individuals (HNWIs) in the USA were optimistic about the prospects for their investments in 2015. According to a survey of over 1,000 American HNWIs carried out by Morgan Stanley, 93% expect their investment portfolios at least to remain constant this year, while almost half of them expect them to improve.
The sample polled represents investors who have investable assets of $100,000 or more. One third of them have assets worth more than $1m. More than half of those questioned expect the investment climate to remain constant, while the optimists and the pessimists on either side of them were evenly divided: 23% expect a better investment climate, 22% a worse one.
Whether through patriotism or simply well-founded confidence in their own country’s economy, three-quarters of respondents said that the US was the best place to put their money. Other favoured investment locations are Japan (42%), India (40%) and China (38%). Perhaps unsurprisingly, the least favoured destinations are those currently mired in conflict. In a mirror-image of the confidence in the US economy, three-quarters of respondents said that they would not be putting their money into the Middle East, Ukraine or Russia.
The most popular sector for investment this year is technology: a massive 87% suggested they would be looking to invest there. Other sectors which fared well were bio-technology, with 75%; pharmaceuticals, with 71%; energy, with 69%; and healthcare (65%). At the other end of the scale, consumer discretionary attracts only a quarter of the HNWIs polled; and just above that sector come aerospace, insurance, entertainment and tourism, all of which are favoured by under or just a third of investors.
Equities are set to be the single most popular form of investment for Americans in 2015, with 44% of respondents saying they will allocate their portfolios to equities. Indeed, almost half of the millionaires say that is where they will invest. Cash, fixed income and other unspecified investments each account for around 20%.
On the negative side, there was consistency over investor concerns. Foreign conflicts worry 86% of those polled, but there are almost equally high concerns about the possible effect of terrorism in the US itself, the government budget deficit and US income inequality, a subject recently highlighted by President Barack Obama in his State of the Union Address.
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