The UBS Investor Sentiment survey finds that cash holdings remain high but investors plan to buy stocks.
Forty-one percent of investors are considering increasing their holdings in stocks over the next six months, compared with 12% who are looking to reduce them
The most important areas for investors are industries being transformed by technology, with 70% citing them as a top opportunity
Investors continue to hold elevated levels of cash in their portfolios but are considering allocating more to stocks, according to UBS’s quarterly Investor Sentiment survey of individual investors and business owners globally.
Cash forms 22% of individual investors’ portfolios globally, declining just three percentage points since September 2020. The high cash weightings contrast with positive market and economic developments over that timeframe, including the rally in stocks, the rollout of vaccines, and the improvement in economic indicators.
However, 41% of investors are thinking about boosting their exposure to stocks in the next six months, compared with 12% who intend to cut it and 47% who wish to keep their portfolios the same.
In particular, 70% of investors see technological transformation as a top theme over the next six months, with 64% believing that stocks are an effective way to diversify portfolios during the recovery and 63% having the view that sustainable investing is a promising opportunity.
Half of investors are also very concerned and 26% are somewhat concerned that cash will take a performance hit if inflation rises too much. Forty-one percent say they would increase their holdings of stocks in such a scenario and 31% say they would increase their real estate positions.
Iqbal Khan, President of UBS Europe, Middle East and Africa and Co-President of UBS Global Wealth Management, said: “We are pleased to see investors citing sustainable and thematic investments among their top opportunities. As the market rally advances, we believe these areas will remain an important means of diversifying portfolios away from traditional stock and bond allocations.”
