The UBS group carried out a survey on investor’s confidence in order to know their positions during the COVID-19 period.
This survey carried out in 14 countries, between April 1st and 20th 2020, with 2,928 investors and 1,180 entrepreneurs, takes into account investable assets of at least 1 million USD for investors, and a turnover of at least USD 1 million for entrepreneurs (with at least one employee other than themselves).
The global sampling leads to two observations:
Almost half of wealthy investors expect to keep their stock portfolios at the same level in the next six months, while 37% plan to invest more, according to UBS’s quarterly global survey
The share of investors expressing short-term optimism on their region’s economy fell most in the US and least in Europe outside Switzerland
Before going into more detail on the data from this survey, UBSwonders at the same time about the best possible investments in a world that will certainly be more indebted, less globalized and more digital:
- Face to the indebtedness of countries, UBS advises to reassess the exposure to cash and bonds, and to seek alternative diversifiers.
- The populism and protectionism which will undoubtedly emerge from this crisis will have to lead investors to consider a global diversification of their portfolio, notably in automationand robotics.
- Finally, the wave of digitalization caused by the Covid-19 will certainly lead investors to a growing interest in everything related to digital transformation, with a diversification of the sectors in Healthtech, genetic therapies, e-commerce, and food revolution.
70% of respondents said they are optimistic about the long-term economic outlook for their region, virtually unchanged from the prior survey three months previously.
46 % expressed optimism on the short-term outlook, down from 67%. The share of investors expressing short-term optimism fell most sharply in the US, from 68% to 30%, and least sharply in Europe outside Switzerland, from 58% to 50%. In Asia, it fell from 71% to 55%; in Latin America, from 60% to 49%; and, in Switzerland, from 47% to 28%.
Globally, 47% of investors expect to keep their stock market investments the same in the next six months, while 37% plan to invest more. Additionally, 23% believe now is a good time to buy stocks, and another 61% see an opportunity to buy if stocks fall another 5-20%.
In general, business owners are also positive on the longer-term outlook and express a continued desire to invest in their own firms. 61% are optimistic about their businesses, down from 73% in the prior survey. 27% plan to hire more versus 17% who plan to downsize. The gap between those planning to hire and downsize was biggest in Latin America (+22 percentage points) and lowest in Switzerland (+2 percentage points).
Both investors and business owners cited COVID-19 as their top concern, at 57% and 60% of respondents, respectively.
«Ninety-six percent of investors worldwide say COVID-19 has affected their lifestyle in some way, with more than half mentioning practicing social distancing, avoiding crowds, and refraining from travel. However, they have diverging views on when the worst of the crisis will be over, with a third citing by the end of June, a third citing the fall and a third citing the end of the year or beyond.»Paula Polito, Divisional Vice Chairman, UBS Global Wealth Management
Only 35% of US investors are bullish on US stocks over the next six months, down from 64% three months ago. However, US investors are the most likely to believe now is a buying opportunity (at 33%). 40% of US investors believe COVID-19’s worst impact will be over by the end of June, with a further 28% saying by the end of September.
42 % of Latin American investors plan to invest more in the next six months – higher than the global average (37%). 47 % feel optimistic about their stock market, the second highest percentage worldwide, while 42% feel COVID-19’s worst impact will be over by the end of June, the most of any region.
46 % of European investors feel optimistic about European stocks, down from 57%, but 43% plan to invest more – the most of any region. 41 % expect COVID-19’s worst impact will be over by the end of June, the second highest percentage globally.
Like their peers in the rest of Europe, Swiss investors grew more cautious. 35 % were planning to invest more in the next six months, while 30% felt COVID-19’s worst impact would be over by the end of June, below the global average.
51 % of Asian investors were bullish on the six-month outlook for stocks in their region – the highest of any region surveyed. 85 % said the virus would be over by the end of either June, September, or December, one of the highest percentages globally.