Most UK-based investors are dissatisfied with the performance of their investments over the past 12 months, with high inflation and geopolitical conflicts cited as major challenges, new research from RAW Capital Partners has found.
The Guernsey-based investment management firm commissioned an independent survey of 756 UK-based investors, all of whom have investments in excess of £25,000, excluding the value of their residential property, savings and pensions.
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It found that just 47% of investors are pleased with how their investments have performed over the last 12 months. Over two fifths (45%) stated that high inflation has made it more challenging to manage their investments, while 32% noted that rising interest rates have negatively impacted their portfolio performance over the past two years.
Has the geopolitical landscape affected portfolios?
RAW Capital Partners’ survey also found that a majority (57%) of investors believe the global political and economic landscape in 2024 has been more turbulent than at any other time in the past decade. This heightened turbulence is influencing investment decisions, with 38% of investors indicating that geopolitical conflicts and instability have affected their strategies over the past year.
When asked about the actions they are taking to manage their portfolios in the current economic climate, two in five (38%) said that diversifying their investment portfolio is priority to help them manage market volatility.
Most investors are still negative
However, for the majority of UK investors, their outlook is not optimistic. Only 40% of the investors surveyed said they are confident their investments will perform well in the next 12 months.
Ben Nichols, Interim Managing Director of RAW Capital Partners, said: “Our research clearly illustrates the impact that recent economic and geopolitical turbulence has had on investors in the UK. Many are struggling to adapt to political uncertainty and macroeconomic trends like high inflation and interest rates – the result is that less than half are happy with how their investments have performed in the past year.”
With UK and US elections approaching, and it being unclear how the UK economy will perform in the second half of the year, there could be more challenges to navigate. Nicholas said it is positive to note that two fifths of investors are turning to diversification as a priority.
“We are by no means out of the woods when it comes to geopolitical conflict and economic headwinds, so it is important that investors continue to protect their portfolios against market volatility by assessing which asset classes and investment tactics can best enable them to achieve their long-term financial goals,” Nicholas said. “Drawing on the benefits that diversification in non-correlated asset classes can provide will continue to reap rewards.”
