Despite the continuing bull market, high-net-worth investors are looking to alternative investments to protect their portfolios, according to Millennium Trust Company, a retirement and institutional custody service provider based in Oak Brook, Ill.
Investors with $200,000 in annual income have slowed their investments in stocks, bonds and mutual funds and instead are exploring opportunities in private equity, real estate and hedge funds, according to a Millennium Trust investor survey released Tuesday.
The survey, which asked 500 high-net-worth investors about their current holdings and future investment strategies, showed that 47 percent of participants invested in individual stocks in the past year, a 10 percent decline compared to last year.
The drop was even more pronounced when it came to individual foreign stocks, where new investments dropped almost 16 percent compared to last year. Investments in individual bonds also declined 8.6 percent over the same period in 2017, Millennium Trust said. Instead, 90 percent of investors said they were willing to invest in alternative assets.
“In spite of this historic bull market, we are seeing more investors interested in diversifying portfolios through alternative investments,” said Gary Anetsberger, CEO. “Technology is fueling a wider range of opportunities for investors and giving more individuals access to sought-after asset classes like private equity, real estate and hedge funds. There is also a growing interest in private debt, infrastructure and natural resources investments.”
Almost one-third of respondents reported investing in real estate, with 73 percent of those investing in single-family rental properties. Twenty percent reported that private equity is a core holding, and 14.6 percent reported investing in hedge funds.