The majority of private investors remain uncertain about where to invest their money in 2006, highlighting the need for professional advice, according to research by New Star Investment Funds.
The survey of more than 2,000 investors’ predictions of asset class performance reveals nearly half of respondents (49%) do not know which asset class will perform best in 2006.
A further 24.1% of respondents think buy-to-let residential property will be the best performing asset class, while 10.2% opt for commercial property, 5.1% for UK equities, 4.6% for global equities, 3.7% for cash and 3.2% for bonds.
But a ranking of how each asset class performed in 2005 reveals global equities were the top performer with 23% of the total returns, followed by UK equities with 22% of returns and commercial property with 18.8% of returns.
Corporate bonds, gilts, cash and buy-to-let residential property contributed 10.6%, 7.9%, 4.7% and 3.2% respectively.
Phil Wagstaff, managing director of UK sales and marketing at New Star Investment Funds, says: “This research raises a number of issues. It shows the British public’s love affair with buy-to-let residential property continues, despite a long term trend of falling yields and low capital appreciation. Given that Hometrack forecasts residential property prices to rise only 2.1% over the next three years, this is a cause for concern.”
He suggests the forecast, coupled with investors’ uncertainty over which asset class will perform best, highlights the need for professional advice.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7968 4554 or email [email protected].IFAonline
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