HNW investors keeping $100bn on the sidelines

By Jessica Yun
 — 1 minute read

Though the number of Australian high-net-worth investors has risen for the first time in three years, market volatility has seen an accumulation of $100 billion in uninvested ‘excess cash’, according to Investment Trends.

New research from Investment Trends has revealed the number of high-net-worth (HNW) investors rose by 10,000 (2 per cent) to 435,000 since numbers stalled in 2014.

These investors hold over $1 million in investable assets, excluding their own home, business and non-SMSF super and the 435,000 are expected to hold $1.7 trillion in investable assets in total, according to a statement.


Investment Trends senior analyst King Loong Choi said growth in assets collectively controlled by HNW investors was driven by “both an increase in the number of HNW individuals and also existing HNWs becoming wealthier”.

“The growth in investable assets controlled by HNWs was led by those in the higher wealth brackets,” Mr Choi said.

“These investors – who predominantly draw their wealth from business profits, share investments, and property investments – have benefited immensely from the strong performance of both the Australian share market and property market over the last year.”

However, one-third of total cash holdings of HNW investors – or $1 billion – remained uninvested, with Mr Choi pointing to market volatility as the reason.

“Almost all HNW investors say they expect to face investment-related challenges in the coming year, and this uncertainty has led to a large build-up of cash holdings,” Mr Choi said.

He added that the “perceived threat” of another global financial crises and investment uncertainty constituted two of HNW investors’ chief concerns.

“Despite their muted outlook, half of HNW investors want material capital growth in their portfolios in the year ahead, and product manufacturers and technology providers play a vital role in assisting HNWs achieve their investment goals,” Mr Choi said.


HNW investors keeping $100bn on the sidelines
high net wealth, HNW, volatility, excess cash, Investment Trends, King Loong Choi, GFC
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