Cash savings continues to remain the most popular asset class among UK investors, new research commissioned by HYCM has found.
More than 900 UK-based investors, all of whom have investments in excess of GBP10,000, excluding the value of their residential property and workplace pensions, were surveyed on behalf of the trading broker.
The research found that the most common asset classes at present are cash savings (70 per cent), stocks & shares (40 per cent), and property (38 per cent).
Asked about their investment plans in 2021, 38 per cent of all investors said they will be putting more money into their savings account. Over a quarter (27 per cent) will be buying more shares while 21 per cent are looking to invest in property.
When it came to the least popular asset classes, only 21 per cent of investors said they held cryptocurrencies, 20 per cent in forex (foreign currencies) and 19 per cent in classic cars. However, 18 per cent of investors said they will be investing in cryptocurrencies in 2021.
Overall, 39 per cent of investors say the pandemic has radically altered their finance and investment strategy. Nonetheless, nearly three-quarters (72 per cent) are confident in the way they are managing their finances and investments in the current climate, with 53 per cent confident they will be in a stronger financial position following the pandemic.
Giles Coghlan, Chief Currency Analyst at HYCM, says: “HYCM has been regularly commissioning surveys to uncover how investors are managing their portfolios. Interestingly, while there have been some small fluctuations, today’s results are very similar to the findings first uncovered at the beginning of the Covid-19 pandemic.
“While fiscal and monetary stimulus have been positively received by the market, investors are still treading carefully. This is why cash remains king, despite interest rates being at record lows.
“The big question now is what kind of assurances investors will need to look to beyond cash savings. Should the vaccine rollout and current lockdown successfully curb Covid-19 cases, I’d expect more investors to start moving some of their cash into other assets.”
Stavros Lambouris, CEO at HYCM International, says: “The research shows that investors feel confident in the way they are managing their finances. This is positive and reflects the adaptability of investors as they navigate the market conditions brought on by the pandemic.
“As was the case in early 2020, markets are riding high at the moment. However, we should not let this overshadow the problems still posed by Covid-19. A sudden change in circumstances could result in an abrupt risk-off scenario, with investors retreating to safe-haven assets.”