Dubai: Gulf-based individual investors surveyed in the UAE, Qatar and Kuwait ranked as the world’s most risk tolerant investor group, according to a global survey by Natixis Global Asset Management, a global asset management company in the world.

Nearly 70 per cent of Gulf-based respondents are more willing to endure higher levels of risk now than they could a few years ago, in contrast to less than half of global investors (49.7 per cent) who say the same. The survey finds that for more than 83 per cent of the Gulf investors, asset growth is increasingly becoming a priority over simply protecting principal.

The risk tolerance in Europe was found still lagging with 71 per cent of respondents in the mood to take as little risk as possible. The overall mood is better in the US, with 53 per cent of respondents willing only to assume minimal risk. Progress is evident, but it is not happening at a velocity that creates exposure to the additional risk necessary to meet retirement objectives.

“Many individual investors have set aggressive investment targets, but don’t have a realistic way of reaching them,” said John Hailer, chief executive officer of Natixis Global Asset Management in the Americas and Asia.

“Something has to change. The markets have reached new heights and investors feel generally comfortable about portfolio performance. But without a plan that incorporates individual risk and personal benchmarks, the odds are diminished that investors will meet their goals, and that is the greatest risk of all,” said Hailer.

The Natixis Global Asset Management survey showed that, for many individual investors around the world, including the Gulf region, performance is being measured in more personal terms. When it comes to measuring success, nearly twice as many Gulf-based individual investors (40 per cent ) cited meeting their savings targets as a key benchmark, rather than overall market returns (22 per cent). Sixty-two per cent said they would be happy to achieve their investment goals over a year even if they underperformed the market, 64 per cent are willing to set a target return that is independent of overall market returns, and 69 per cent worry more about the risk of not achieving their investment goals than the risk of not beating the benchmark.

“What we found was that individual investors are more focused on meeting their long-term goals than beating short-term market movements,” said Moad Touhami, ‎Director and Head of Mena Distribution. “Performance is personal and it’s up to asset managers to provide the type of solutions and support that fit the individual needs of investors and their advisors.”

 

Retirement planning still low

When it comes to retirement, 69 per cent of global investors want to retire by the time they reach the age of 65. Yet only 22 per cent are very confident that their current investment approach is on track to provide steady income in retirement. Thirty-seven per cent of investors worldwide have little or no knowledge of the annual income they need to live comfortably in retirement. One-half (50 per cent) have little or no knowledge of the annual return needed to reach long-term goals, and 54 per cent have little or no knowledge of the strategies needed to achieve steady returns through market cycles. However, investors appear to be more acutely aware of the risks to their financial security in retirement and their need to plan.

Among the perceived risks to financial security in retirement, the most notable change among investors worldwide is greater awareness of the costs associated with living longer in retirement. Long-term care costs not covered by insurance was cited by investors around the world as the top threat to their financial security in retirement, rising 10 percentage points over the past year to surpass insufficient proceeds from pension and even a decline in savings due to market conditions.