Market correction? Third of UK wealth managers holding cash
30 November 2017
A third of wealth managers in the UK are holding cash across their clients’ portfolios in anticipation of a correction, a survey by Legg Mason Global Asset Management has found.
Significant progress in the UK and global equity markets, coupled with positive returns across other asset classes, has prompted concern among wealth managers that the market has got ahead of itself.
As a result, 32% of wealth managers, who collectively manage in excess of £100 billion, said they are holding cash to protect against a correction.
Despite the findings, the survey found the overriding outlook was positive. In total, 39% of respondents said they were ‘somewhat optimistic’ when it came to their attitude to risk, with a further 30% describing themselves as ‘optimistic’ and another 1% saying they were ‘very optimistic’.
Of the remainder, 23% were ‘somewhat pessimistic’ and just 6% consider themselves to be ‘pessimistic’.
This trend was also reflected in wealth managers’ take on the opportunities available across investment markets, with 82% of respondents giving a positive view.
Alex Barry, head of UK sales at Legg Mason Global Asset Management, said: “Having seen so many assets appreciate meaningfully throughout 2017, it is understandable wealth managers may be adding some protection to portfolios now.
“Nonetheless, with interest rates near record lows, the environment remains supportive for investors keen to take some risk to achieve a return above cash, and we could see a continuation of the current trend for some time to come.”
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