According to a survey from fund manager Schroders – that surveyed 20,000 investors in 28 countries - , the majority of retail investors expect a 12% return from investments over a year despite investing mainly in low risk assets.
Less than 25 % of the retail investors are planning to invest in equities that may have better chances of producing higher returns but at higher risk. Nearly half of the investors have their money in low-risk, low-return assets, such as cash, and about a third are in medium-risk assets, such as bonds. Despite investor confidence is rising - half of the surveyed investors feel more confident than a year ago about investment opportunities -, many retail investors have a short-term investment horizon of one to two years.
Nearly 90% of retailers said they have profited from investments in the past 12 months, with average gains of 10%. This is in stark contrast to investors polled two years ago, who reported making an average loss of 4.6%.
Massimo Tosato, executive vice chairman of Schroders said: “Expecting double-digit returns within the next 12 months, while only placing less than a quarter (21%) of their investment portfolio in higher risk assets suggests that investors are not taking a realistic approach to investing”.
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