ABN AMRO backs high-income products
UK investors are more likely to invest in individual shares and savings accounts for future income than their European counterparts, according to research by ABN AMRO Asset Management.
The survey of private investors in the Netherlands, Sweden, France, Germany, Italy and the UK, revealed that British investors favour putting money aside in a savings account or investing directly in the stock markets to generate income, rather than investing in mutual funds, the preferred method of investing on the Continent.
However, of those UK investors who do favour mutual funds, like their German and Italian counterparts, they tend to invest in balanced and multi-asset funds above equity and bond funds. Only a small number of UK investors are investing in high income funds, and favour riskier equity income funds over high yield bond or property funds.
The research highlighted that although UK investors are more familiar with high income funds (66%) compared to European investors (only 37% in France), there is still a lack of understanding of the benefits of high income strategies amongst the general UK investor.
Wouter Weijand, global head of high income equity for ABN AMRO Asset Management, said: “Research indicates that UK investors are more familiar with high-income products than their European neighbours. However, if you consider that only 56% of UK investors are seeking professional advice when making their investment decisions, there is a real need to educate investors about the potential benefits of high-income products as part of a more diverse income strategy.
“Although many British investors shun high income products, it is encouraging to see that of those who do invest for high income, 54% have chosen high income equity funds. These combined with a balanced savings portfolio make for a more diversified investment approach.
“As investors become more aware of the benefits of investing for income we expect to see consumers seeking higher dividend yields which we hope will lead to a long-term trend of high income investing across Europe.”