Qatar’s high-net worth individuals (HNWIs) are optimistic on their investments in the real estate sector, according to Barclays Wealth.
“Qatari respondents who participated in the survey expressed a positive outlook for the real estate sector with 100% stating that real estate would be a safe investment over the next 12 months,” said the report Risk and Rules: The Role of Control in Financial Decision Making.
In addition to considering the different financial personality traits that exist amongst wealthy investors, the report shows their views on nine main asset groups: real estate; cash; alternative strategies (long/short funds, arbitrage etc); equities from both developed and emerging markets; bonds from developed governments, blue-chip corporations and high yield/emerging markets; and commodities.
“Qatari investors distinguish themselves among their peers by their enthusiasm for investments in real estate. This strategy must have rewarded them as they show the greatest contentment with their financial situation,” said Khurram Jafree, head of Investment Advisory, Barclays Wealth Middle East and North Africa.
The report said 43% of Qatari investors believe that investment in cash is risky, while 24% saw cash as safe. Less than a third (32%) of those surveyed currently hold cash investments.
Qatari HNWIs also demonstrated ambiguous sentiments towards investment in alternative strategies with nearly half (42%) believing they are neither risky nor safe, 15.7% perceiving them to be risky while 37% taking the complete opposite view and thinking they are safe.
Regardless of their views on the safety or riskiness of this asset class, alternative strategies have not been particularly popular with Qatari HNWIs and only 16% have such investments in their portfolio, it said.
Equities further highlight mixed opinions among Qatari investors with 39% of them finding investments in emerging market equities risky, yet almost exactly the same proportion (35%) find them safe. “There is however a greater difference when it comes to developed market equities, as a clear majority (62.7%) of respondents considers them a safe investment option for their portfolio,” the report said.
Investments in developed government bonds are considered safe by over half of the investors (55%), it said, adding corporate and investment grade bonds are also considered safe by 53% of those surveyed, while only 10% view them as risky. High yield and emerging market bonds are considered safe by a much lower proportion of investors (33%).
With no respondents viewing commodities as very risky and less than 14% of them seeing this asset class as quite risky, Qatari investors show more confidence in commodities than any other markets in the world.
“Qatari investors do not see commodities as particularly riskier than the average risk carried by all asset classes,” Barclays Wealth said, adding that “43% of investors have commodities in their portfolio, making them the second most popular asset class after real estate, the country’s favoured investment”.
As the report clearly illustrates, there are considerable differences among wealthy investors in Qatar and between Qatari investors and their counterparts in the region and the world, Jafree said, adding “this is a timely reminder, if one was needed, that the wealth management industry needs to tailor its services at the individual level and that one-size fits-all approaches do not work.”
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