New research from HYCM has revealed that UK retail investors are holding their nerve amid the ongoing Russia-Ukraine war, despite significant concerns about future implications of the crisis on financial markets.
In a survey of 726 UK-based investors, only 14% said they monitor the conflict between Russia and Ukraine when thinking about their investment strategy. Another 14% said they were concerned about the risk of a wider conflict and were investing more carefully as a result, while just 10% have made changes to their portfolio in response to the war.
Despite this, HYCM’s research found that many were taking a moral stance, with 67% of investors expecting consumers and investors to boycott companies who continue to do business with Russia. This rose to 87% of investors with portfolios in excess of £250,000.
To guard against inflation, 37% of investors pledged to increase their investment in ‘safe haven’ assets, while 25% expect to increase their investment in defence stocks and cyber security. Elsewhere, 44% said they will reconsider their investments that have exposure to Russia or companies that support its actions.
Looking ahead, more than two thirds (69%) believe the conflict will bring about permanent changes to international trade and investment flows between Russia and the West.
Giles Coghlan, chief currency analyst at HYCM, said: “Two months on since Russia sent troops into Ukraine, news bulletins predicting prolonged aggression with ruinous consequences for the global economy have dominated the media. If the headlines foretelling chaos in the markets are to be believed one would be forgiven for thinking that investors have been rocked by the crisis and left scrambling to protect their portfolios. Our research shows that this is not the case.
“Despite ever-mounting concerns over inflation, commodities, and the prospect of wider conflict, retail investors have held their nerve so far.
“While they clearly hold strong views about the sanctions placed on the Russian economy and the various possible scenarios that could unfold, many are shutting out of the din of current events as far as their strategies are concerned. Rather, the vast majority appear attuned to the bleak reality that the market reaction to these events can be surprisingly mild.
“Indeed, when a crisis is staring us in the face, sometimes switching off the news is the wisest option.”
