The Markets March 12, 2008

Affluent Investors Like Both Mutual Funds and Alternatives

Research by The Phoenix Companies finds affluent households invest significantly in both mutual funds and alternatives, and half plan to change their investment allocations in the next year.

Reported by

Rebecca Moore

In fact, 81% of respondents said they owned at least one mutual fund outside of an IRA, 401(k), 403(b), or other retirement plan and 74% hold an alternative investment.

According to a report on the research findings, real estate is the most widely held alternative investment (around 45%), followed by exchange-traded funds (ETFs) (nearly 30%), hedge funds/hedge fund of funds (around 25%), and private equity funds (over 20%).

For 2008, the research results show that regardless of investment category, affluent investors are split about their investment plans. Forty-nine percent of mutual funds owners and 52% of alternative investment owners said they will continue to invest the same amount or more in the coming year, while 51% of mutual fund owners and 48% of alternative investment owners expect to be bearish and invest less in the coming year.

Phoenix said the survey suggests that the real concern for the coming year is overall investor confidence in the market. Affluent investors are undecided about whether to be bullish or bearish for 2008.

The January 2008 Phoenix High-Net-Worth Market Insights report is located here.