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Dubai, United Arab Emirates: Many EMEA ultra-high net worth investors (39%) continue to believe equities will be the best performing asset class over the next 12 months, according to J.P. Morgan’s Spring Private Client Survey. Despite on-going global uncertainty, investor sentiment has remained largely unchanged since the winter Private Client Survey1, but with increased volatility expectations for 2019, many investors are now beginning to adopt a more defensive investment approach.
A third of the ultra-high net worth clients surveyed (33%) are investing in higher-quality assets to help them to position their portfolios more defensively, whilst a quarter of investors (24%) are moving from heavily cyclical sectors to focus on long-term investment opportunities in industries such as healthcare and technology. A further fifth (20%) are moving to invest in actively defensive sectors such as utilities, real estate and telecoms.
“Like many of the ultra-high net worth clients we surveyed we’re also mostly positive on equities for 2019, which is reflected in our overweight allocation of equities in managed portfolios,” said Tara Smyth, Head of the Middle East and North Africa markets for the J.P. Morgan Private Bank. “As we enter late cycle investing, we see a movement from cyclical growth sectors to greater exposure to secular growth stories. The technological revolution isn’t slowing down, while the healthcare sector has enjoyed consistently positive earnings growth over the past 20 years.”
“As markets increasingly reflect the strains associated with an ageing economic cycle, we are de-risking,” Smyth said. “We liken this process to calibrating the right mood with dimmers, rather than simply flipping a switch from on to off. Within and across asset classes we’ve taken full advantage of the dimmers available to us to ensure that the appropriate level of risk is being taken. However, whilst our expectation for growth to slow merits this caution, we believe it is still too soon to shift to a fully defensive posture. That view, along with others, will certainly evolve as 2019 unfolds.”
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About the Spring Private Client Survey
* Around 800 European ultra-high-net-worth investors participated in a private client survey, which polled participants across Denmark, France, Germany, Greece, Turkey, Russia, Spain, Switzerland and the UK on global investment issues.
Key topics included financial markets, investment conditions, and the outlook for the global economic and political environment. It was conducted as part of J.P. Morgan Private Bank’s latest Investment Insights series, held across leading cities in Europe between January - February this year.
About J.P. Morgan Private Bank
J.P. Morgan is a global leader in financial services to corporations, governments, for-profit and not-for-profit institutions and wealthy individuals. Through its private banking franchise, the firm delivers customized wealth management advice and solutions to wealthy individuals and their families, leveraging its broad capabilities in investing, estate planning, family office management, philanthropy, credit, fiduciary services and special advisory services to help its clients advance toward their own particular goals. For more than 150 years, the Private Bank’s comprehensive and integrated product offering, commitment to innovation and integrity, and focus on placing the interests of its clients first and foremost have made J.P. Morgan an advisor of choice to people of significant wealth around the world.
J.P. Morgan Private Bank is a marketing name for the private banking business conducted by JPMorgan Chase & Co. and its subsidiaries worldwide.
1 In our Winter Private Client Survey (December 2018) 38% of clients believed equities would be the best-performing asset class over the next 12 months
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