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High net investors flock to shares

High net worth (HNW) investors are moving into the equity market, with the sector recording its first dip in cash and term deposits since 2009, according to research from Investment Trends.

Investment Trends 2013 High Net Worth Investor Report found that HNW investors increased the proportion of their assets in direct shares from 26 per cent to 32 per cent during the year.

Meanwhile, investment in cash and term deposits declined from 20 per cent to 16 per cent, which Investment Trends senior analyst Uwe Helmes said gives an indication of things to come.

"‘We find HNW investors to be leading indicators for what the general investor population will do," Mr Helmes said.

“While the general population continued to accumulate cash reserves in 2013, according to RBA figures, HNW investors were ahead of the curve with a quarter of them already in the process of re-investing their excess cash."

The number of HNW investors with assets in direct shares also increased over 2013, rising from 85 per cent to 90 per cent while the average amount invested in direct shares rose from $950,000 in 2012 to $1.15 million in 2013.

The number of HNW investors using hybrid securities rose from nine per cent to 23 per cent in 2013 while the proportion of HNW investors using ETFs increased from five per cent in 2009 to 13 per cent in 2013.


In terms of regions, HNW investors are showing strong interest in North America with eight per cent intending to invest there in the next 12 months.

Mr Helmes said half of all HNW investors hold some form of international investment, which is up from 40 per cent in 2009.

"Wealthy investors are showing increasing interest in investing globally," Mr Helmes said.

"However, when you look at what proportion of total HNW assets is invested in overseas markets it is only 6 per cent on average – a sign of strong home bias even among HNW investors."