Investment advisers are forecasting stock market volatility will continue to be above historical averages for at least the next five years, research from financial services company Castle Trust suggests.
Its national study of investment advisers found 68 per cent predict that volatility will remain above historical averages for the next three years, dropping slightly to 62 per cent over the next five years.
Only when it comes to predicting volatility over the next ten years does the percentage forecasting above average volatility drop below half of advisers – and even then 46 per cent expect volatility to remain high.
By contrast, the research shows around two-thirds of investment advisers believe house prices will continue to be less volatile than equities over three, five and ten years. Over the next three years, 68 per cent say house prices will be less volatile, while 67 per cent expect this over five years and 66 per cent over ten years
Castle Trust has launched with two new investment products that will enable millions of people, many of whom do not own their own homes, to invest in the UK housing market without having to buy a property.
Sean Oldfield, chief executive officer, Castle Trust, says: “The UK housing market has provided excellent risk-adjusted returns over the years, with average annual returns of three per cent above inflation over nearly three decades. House prices and household incomes are inherently linked over the long term, providing investors with a good inflation hedge.
“Housing is the UK’s largest asset class, worth over GBP4trn which is more than the FTSE All-Share, commercial property, corporate bonds and gilts combined.
“Our HouSAs enable investors to access the returns of national house prices without the risks or volatility attached to owning a property while also enabling people to save for their first home.”
Castle Trust’s HouSAs offer income and growth investment products linked to the Halifax House Price Index with returns that beat the index, whether it rises or falls.