More than three-quarters of investors say fear drives people to increase cash holdings, according to a survey by BlackRock Asset Management Canada. Further, 67% expect a guaranteed negative return from such an approach.
“Investors are unsure what to do with their money in this new world where the returns they once took for granted are constrained by low yields, market volatility and shifting investment patterns,” says Mary Anne Wiley, managing director and head of iShares at BlackRock Canada.
People are starting to look beyond the traditional 60/40 split to devise a more dynamic portfolio, Wiley adds.
In June, $1.2 billion flowed into the Canadian ETF market, an increase of 5.4% compared to June 2011.
Additional survey highlights:
- Most important considerations when making investment decisions: low fees (81%), diversified portfolio (77%), minimizing losses (77%), generating income (74%), earning a dividend (67%);
- Investors with more than $250,000 invested are more likely (57%) than those with less to seek liquidity and diversification by sector. They are also more interested (37%) in investing in foreign markets;
- Investors under 40 years of age are less concerned with minimizing risk (73%), diversifying exposure (65%) and ensuring value grows faster than market indices (51%), and are more concerned with foreign holdings (43%);
- Investors aged 61 and older are more interested in diversification (85%) and ensuring their investments keep up with market indexes (70%);
- More than three-quarters of wealthy investors agree corporate accounting concerns and poor earnings have become more common.