High-Net-Worth Investors Share Thoughts on Generating Income


They like dividend-producing stocks and are tempering expectations for fixed income, a survey found.



Interest rates are at historic lows, and investors are looking to alternative investments as higher income-generating strategies, according to Fidelity Investments’ poll of customers with at least $250,000 in investable assets on a range of income-generation strategies. They are actively looking for dividend-producing stocks and corporate bonds for higher yields in a  low-interest rate environment.

Key findings of the poll include:


  • The next investing dollar: While most investors (44%) said they would put their next investing dollar in U.S. stocks, 16% would put it in investment-grade corporate bonds, 9% chose high-yield bonds and 9% chose “under the mattress.”
  • Dividend-producing stocks favored: For the next six months, 54% of respondents are most bullish about dividend-producing stocks, followed by investment-grade corporate bonds (15%).
  • Macro economic issues: Twenty-eight percent cite the eurozone crisis as their most pressing financial worry, while 27% indicate U.S. debt problems and 24% cite high unemployment/recession.
  • Tempered expectations for fixed-income: Even though fixed-income investments returned roughly 7% in the last 12 months, only 18% of high-net-worth investors think they can achieve or beat those same results over the next 12 months. Nearly one-third (32%) think their fixed-income returns will drop below 4% and another third (32%) expect between 4% and 6%.
  • Higher taxes expected: Eighty-six percent of high-net-worth investors believe taxes will be higher next year, both on income and on investment income such as capital gains and dividends. But more than half (52%) said they will do nothing differently, when asked what tax strategy they would employ.


“This group of high-net-worth investors are realists about this low-interest rate environment, but are not resigned to accepting low returns,” said John Sweeney, executive vice president of Fidelity Planning and Advisory Services. “They’re willing to look to alternative products to find yield, but we encourage them not to stretch too far and lose sight of their underlying investment strategy and encounter unnecessary risk.”

Fidelity has made available an article based on content from its portfolio managers, “The Upside-Down World of Income Investing.”  

The Fidelity Investing for Income Poll was conducted June 13 via a webcast interface provided by On24. On average, 1,204 attendees responded to each question and the majority have investable assets in excess of $250,000. On24 is not affiliated with Fidelity Investments.

The poll was taken during the live “Fidelity ViewpointsForum: Investing for Income” in Boston, where five Fidelity portfolio managers discussed a range of topics including eurozone implications to the U.S. economy and opportunities in emerging markets.