While the world's richest investors remain cautious about their investment portfolio this year, most are optimistic their residential property investment will deliver the best returns, a new report has revealed.
The Knight Frank/Citi Private Bank Wealth Report 2010 found that on average, property account for 30% of the investment portfolio of those surveyed, followed by 24 % of equities.
In the property sector, half of the respondents said residential investments would offer the strongest performance this year, while 30% reckoned commercial property would lead the market.
High net worth investors also considered capital growth and investment stability as more important when investing than chasing yields.
Aamir Rahim, Asia Pacific CEO of Citi Private Bank said that although equity and property markets have bounced back sharply, the survey responses suggest wealthy investors remain concerned about the state of the global economy with only 5% expecting their fortunes to increase significantly this year.
"The attraction of tangible asset classes remains strong, with property accounting for 30% of the average investment portfolio - the single largest allocation. Residential property is the most popular asset class in the sector followed by commercial property. It is clear that the wealthy still see property as a vital part of their investment portfolios and feel comfortable investing in it,” said Rahim.
"When making property investment decisions, capital growth prospects are the main driver, followed by asset stability and then yields. Investors also seem confident in their own ability, with most ranking this as their main source of expertise, followed by the advice of their peers. The media and the internet were considered the least valuable sources of expertise.”
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