Investors turn to alternatives during recession

Almost a third of UK retail investors are considering alternative assets to bolster their portfolio during the recession, new research has found.

Property investment platform Shojin surveyed 721 UK adults with investment portfolios worth in excess of £10,000, excluding savings, pensions and property used as a primary residency.

30 per cent of respondents said the prospect of a lengthy recession is leading them to consider alternative investments.

Read more: Shojin to launch Jersey-incorporated fund

Meanwhile, 33 per cent said that concerns over the government’s handling of the economy was the factor driving them towards alternatives. Among investors aged 18 to 34, the figure climbs to 59 per cent.

And 29 per cent of investors believe that alternative assets are likely to be more resilient in the economic climate.

However, the research also found that there is still work to be done in improving access to alternative assets among mainstream investors.

Read more: 11.1pc inflation heaps pressure on savers and borrowers

60 per cent of respondents said they find it challenging to determine the best way to gain access to alternative asset classes.

“It has been a bumpy ride to stability across financial markets,” said Jatin Ondhia, chief executive of Shojin.

“Economic volatility has become turbulence and markets are now braced for a lengthy recession, with our research showing there is a notable demand among investors for asset classes that can offer their portfolios resilience and the potential for higher returns.

Read more: P2P well placed for a recession

“While alternative investment strategies have been steadily gaining traction in recent years, our research shows there is a renewed emphasis on diversification strategies motivated by concerns over inflation, interest rates, recession and the government’s economic policy. This is likely to accelerate alternatives’ move into the mainstream.

“However, the research also revealed there is a significant knowledge gap among investors, which is impacting their exposure to alternative asset classes. As ever, investors will need to conduct thorough due diligence, consider their risk appetite, weigh up their strategies and choose investment partners carefully to ensure their portfolio aligns with their investment goals, particularly in the current climate.”