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Investors fail to tackle asset allocation

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Written by:
05/10/2006

Almost half of investors (42%) are completely unaware of the asset allocation of their investment portfolio, research from Fidelity International has shown.

A survey by the mutual fund manager showed many investors do not know exactly how their savings are divided between equities, bonds, cash and property, despite nearly one in five (18%) having over £50,000 of their savings in investment funds and share-based accounts.

More than a third of all investors surveyed (35%) were also unsure of what proportion they should ideally have invested in each asset class. However, the research did show that investors aged between 18 and 29 are the most likely to lean towards cash as the core holding in their overall investment portfolio.

Doug Naismith, managing director of European personal investments at Fidelity International, said: “Our research clearly shows that while some people have got the balance broadly right, for many investors it is a case of guesswork when it comes to constructing a diversified portfolio.

“Younger investors seem to believe a large amount of their savings should be in cash, when in fact your twenties should be the time to concentrate on investing for growth while you still have plenty of time, and your overall investment goals are likely to be longer term.”
 

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