Millionaire investors identify real estate as most popular alt asset class
The majority (77 per cent) of millionaire investors say they own real estate while 35 per cent say they own a related investment, real estate investment trusts (REITs).
This is a key finding of the Morgan Stanley Wealth Management Investor Pulse Poll, a periodic survey of US high net worth investors, including a subset of households with a million dollars or more in financial assets. Questions about investments in alternative asset classes were posed only to the millionaire sample.
The survey found that investors who received advice from a financial advisor are much more likely to say they were knowledgeable about alternative asset classes (57 per cent), compared with those who have not received professional advice (30 per cent).
“This finding underscores the important role financial advisors play in providing information and education about the potential use of alternative asset classes by suitable investors in an appropriately diversified investment plan,” says Andy Saperstein, head of investment products and services for Morgan Stanley Wealth Management.
After real estate and REITs, millionaire investors cite ownership of collectibles (34 per cent), followed by precious metals (28 per cent), private equity (27 per cent), real assets (oil, gas, mining, 17 per cent), private real estate funds (16 per cent), hedge funds (16 per cent), and venture capital (13 per cent).
Asked to recall an alternative investment unaided, 77 per cent of millionaires can recall at least one (led by hedge funds, at 19 per cent), while the remainder (23 per cent) said they could not recall an alternative without prompting.
As with actual ownership, real estate (33 per cent) and REITs (23 per cent) lead the list of alternatives the surveyed investors expect to buy in 2014, followed by collectibles (20 per cent), private equity (19 per cent) and precious metals (16 per cent).
Investors who work with financial advisors say their advisors are well informed about alternative asset classes. Nearly seven out of ten (68 per cent) say their advisors are knowledgeable about alternatives, and four in ten (41 per cent) say their advisors are “very knowledgeable”.