Investors look to alternatives as confidence in banking sector drops
Investors are increasingly considering investing in alternative assets as confidence in the banking sector falls.
According to new research from property lender Shojin, 36 per cent of UK investors who have a portfolio of £10,000 or more, think that alternative assets will play a bigger role in their investment strategy following the recent banking turmoil.
Almost half (49 per cent) of those surveyed said that they have less confidence in the banking sector as a result of the SVB and Credit Suisse collapse, while 32 per cent have seen their investments impacted by the recent banking turmoil.
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44 per cent of those surveyed told Shojin their confidence in traditional investment assets has declined as a result of the recent banking turmoil, while 37 per cent believe diversification is likely to play a bigger role in their investment strategies going forward.
One in nine (12 per cent) said they are exploring a broader range of investment opportunities than they typically would, with this figure rising to 22 per cent among 18-34-year-olds.
“There is no disguising the fact that investors have had to contend with strong market forces over the past year; turbulence and uncertainty would certainly sum it up. And those are two things that investors, like businesses, will be wary of,” said Jatin Ondhia (pictured), chief executive of Shojin.
“With investors at a crossroads between difficult economic conditions and banking sector failures, evidently, many are now plotting a new route to navigate the coming months.
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“A proactive, diligent approach is undoubtedly important during times of turbulence and uncertainty, and Shojin’s study highlights that a great many investors are making moves.
“Diversification is at the heart of this. At present, around two-fifths of UK investors are actively diversifying their portfolios with a shift from traditional to alternative assets a part of this process.”
Alternative assets can include real estate, commodities, private equity and peer-to-peer lending.
Shojin analysts have predicted that more investors will move away from traditional asset classes and towards alternative investments in the year ahead, as part of a wider diversification strategy to help navigate macroeconomic challenges.
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