International Investing Appeals to Affluent Households

Nearly half (40%) of affluent households will continue to, or begin to, seek investments abroad, according to a new report from consulting firm Spectrem Group.

Of the affluent households surveyed, defined as having more than $500,000 in investable assets, about a third (31%) say they are investing more internationally now than in the past.

The most popular countries or areas for investment are: China (30%), Europe (20%), Japan (12%), and India (11%).

Affluent households find international investing to be an alternative investment, using such investments much more frequently than some other well-known alternative investments. REITs are the most popular of other alternative investments, with 27% of affluent households investing in such vehicles. Fifteen percent of affluent households invest in private placements, 14% in venture capital, and just 8% invest in hedge funds.

“The affluent view international investing as an ‘alternative’ approach, and in many cases are seeking more than just mutual funds to satisfy their global investment ambitions. For financial advisers, this suggests a need to provide affluent clients with a sense for how to invest internationally as well as where the best opportunities might be found,” said Catherine S. McBreen, Managing Director of Spectrem Group, in a press release from the firm.

These findings are detailed in a Spectrem Perspective report, “Meeting The Affluent Investors Needs Through International Investing,” released last week. Those interested in a copy of the report can contact Spectrem Group at (312) 382-8284.