Gulf HNWIs 'managing own portfolios'
Dubai, May 24, 2010
Majority of high net worth individuals (HNWIs) in the Gulf are bullish on equities and property and spend a lot of time managing their portfolios, according to a new report by Barclays Wealth, a leading global wealth manager.
The Barclays Wealth report which was released on Monday reveals wealthy investors’ attitudes towards the global economic outlook and prospects for investments in the years ahead.
The study, titled ‘The Changing Wealth of Nations’– is a survey of trends, financial priorities, concerns, and economic expectations of HNWIs around the world covering more than 20 countries, included over 2,000 respondents.
After the most catastrophic economic downturn since the 1930s, the Volume 11 sought to gauge the world’s HNWI’s forecast on wealth over the next 10 years, said a statement from Barclays Wealth.
The report tells an interesting story about HNWIs in the GCC and their investment attitudes and behaviour, priorities in socially responsible spending, as well as their outlook on specific asset classes in the medium term.
These factors combine to create an optimistic outlook for positive economic growth globally as well as the GCC by the wealthy in Saudi Arabia, Qatar and the UAE, said the report.
There is a near universal consensus by Gulf HNWIs on the importance of time spent on actively engaging with their financial manager in the construction of their investment portfolio.
The notion of the wealthy as passive investors has become out of date and HNWIs, particularly in the Gulf states, are taking a more hands-on approach in managing their investments.
About 76 per cent of those surveyed in Saudi Arabia, 70 per cent in Qatar and 90 per cent of respondents in the UAE spend an increasing amount of time actively managing their portfolio, said a top official.
Soha Nashaat, chief executive of Barclays Wealth Middle East, said: “Investors in the GCC are some of the most savvy in the world, and this report shows why: HNWIs in the region spend more time reviewing and adjusting their portfolio.'
'This engaged approach to their investments is a trend that is gaining global momentum and will ultimately help ensure that financial managers are understanding and meeting the needs of their clients,' she explained.
As further evidence of this proactive and engaged attitude, respondents in Saudi Arabia, Qatar and the UAE, are taking a more socially aware attitude towards their lifestyle and becoming increasingly more involved with their communities.
These HNWIs rank in the top five globally in the time spent volunteering for charity; 47 per cent of those surveyed in the UAE, 48 per cent in Saudi Arabia and 47 per cent in Qatar are giving money for charitable causes.
Further, a majority of HNWIs in the region [Qatar – 62 per cent, Saudi Arabia – 78 per cent, and the UAE – 43 per cent] would only buy products that have been ethically sourced.
Commenting on this emerging trend in the region, Nashaat said, 'We believe that the region’s wealthy will change their attitudes to wealth over the next decade, with an increasing role possible for socially-inspired wealth transfer.'
'This will be reinforced by a growing number of young wealthy, more inclined to question the functioning and purpose of wealth investment. The increasingly number of wealthy women will also add to pressure for change, both in terms of information provision and their perceptions of desirable investment priorities,' she remarked.
Interestingly, the responses also reveal climate change to be an important, if not an overwhelming issue.
HNWIs in Qatar (70 per cent), Saudi Arabia (62 per cent), and the UAE (38 per cent) are increasingly concerned about climate change which is in line with global trends.
The Volume 11 reveals that 56 per cent of HNWIs around the world are also concerned about climate change and 42 per cent often encourage friends to buy more environmentally-friendly products.
HNWIs in the GCC countries surveyed are more optimistic on the performance of the global economy and their own local economies. HNWIs from Saudi Arabia (70 per cent), Qatar (88.70 per cent), and the UAE (81.20 per cent) believe that the global economy will grow over the next few years with a minority considering that the growth will take place after a slight deterioration in the near term.
Conversely, figures reveal that 60 per cent of the aggregate of global HNWIs believe that the world economy will be stable or even deteriorate in the near future.
This optimism can be linked to forecasts on various asset classes. Almost all HNWI’s in Saudi Arabia, Qatar and the UAE say that equity and property will increase in performance over a five year horizon, the report said.
HNWIs from the region have been quite certain about their outlook on various asset classes, with few surveyed responding ‘don’t know’ on questions relating to asset class performance, it added.
In terms of real estate all HNWIs of Qatar (77 per cent), UAE (77 per cent), and Saudi Arabia (74 per cent) believe that property will perform quite well over the coming five years.
Furthermore, UAE (73 per cent) and Saudi Arabia (78 per cent) HNWIs believe that equity in the medium term will outperform equities in the short term.
In the meantime, the majority of HNWIs in Qatar believe that the performance of the equities market in the short term will match the medium term performance with only 32 per cent considering that equities’ market performance will increase in the future.
According to Nashaat, the HNWI’s enthusiasm for equities and property continues and will likely sustain over the next five years.
'A degree of investor caution remains after the downturn but wealthy individuals remain engaged with the markets, and demonstrate a considerable degree of self-reliance and composure. Gulf HNWIs exert a more positive outlook than some of their global counterparts on the performance of the global economy as well as their own over the next five years,” she added.-TradeArabia News Service