Almost half of the world’s wealthiest are expected to keep their stock market investments at current levels despite the coronavirus crisis, according to a UBS study. The Swiss banking giant's quarterly global survey found that 47% of the 4,108 wealthy investors and business owners polled expect to maintain their stock portfolio at the same level in the next six months while 37% planned to invest more in equities.
Additionally, almost a quarter (23%) believe now is a good time to buy stocks, and another 61% see an opportunity to buy if stocks fall another 5-20%.
While only 46% of respondents expressed optimism about the short-term economic prospects for their respective regions, 70% were optimistic about the long-term outlook, virtually unchanged from the prior survey three months previously.
The new quarterly Investor Sentiment survey found that the decline in short-term optimism was sharpest in the U.S., falling from 68% in the fourth quarter to 30%.
The share of investors expressing short-term optimism fell 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%.
The survey also found that of business owners in particular, 61% are optimistic about their businesses, down from 73% in the prior survey, while 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,” UBS Wealth Management Divisional Vice Chairman Paula Polito said in a statement. “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.”
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%). Forty percent 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.
Forty-two percent of Latin American investors plan to invest more in the next six months – higher than the global average (37%). Forty-seven percent 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.
Forty-six percent of European investors feel optimistic about European stocks, down from 57%, but 43% plan to invest more – the most of any region. Forty-one percent 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. Thirty-five percent 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.
Fifty-one percent of Asian investors were bullish on the six-month outlook for stocks in their region – the highest of any region surveyed. Eight-five percent said the virus would be over by the end of either June, September, or December, one of the highest percentages globally.
UBS surveyed 2,928 investors and 1,180 business owners with at least USD 1 million in investable assets (for investors) or at least USD 1 million in annual revenue and at least one employee other than themselves (for business owners), from April 1-20, 2020. The global sample was split across 14 markets: Argentina, Brazil, China, France, Germany, Hong Kong, Italy, Japan, Mexico, Singapore, Switzerland, the UAE, the UK and the US.