Today, the UK Structured Products Association (“UKSPA”) announces the results from recent consumer research, showing that structured products continue to meet the needs of a broad range of investors in the UK.
Since 2017, the structured product industry has commissioned regular independent research to take an in-depth look into the investment needs and behaviours of over 2,000 UK investors, exploring their views on various markets and their risk appetite, and analysing how these evolve over time.
Over the past seven years, the survey results show there has been a general increase in the number of investors holding structured products as part of their portfolio, from 1 in 5 investors in 2017 to almost 1 in 4 investors in 2023. Over the same period, holdings of other types of investment have remained relatively consistent or fallen, according to the research:
Percentage of those surveyed* who hold different types of investment
|Investments managed by a fund manager||50%||49%|
|Tracker funds or ETFs||16%||18%|
Source: Harris Interactive.
*Survey respondents are those who are aged 18+, financial decision makers, either hold investment products or are likely to in the next 2 years, and who have investable assets of at least £5,000.
While the results of the 2023 survey are broadly consistent with previous years’ results, there are some interesting trends:
· Risk appetites appear to be decreasing, with an inclination towards products that protect capital, and which include ‘defensive’ features (meaning the ability to generate returns even if markets fall). On average, the preference is to have most of a portfolio in investments that over full or some capital protection, although more sophisticated investors are more inclined to have more of their portfolio in higher risk investments.
· Preferred investment horizons are also decreasing, with almost half the respondents favouring investing over a 0 – 5 year term. However more sophisticated investors are interested in investing over the longer term (10+ years).
· The overall number of investors in the UK has fallen, back to 2019 levels. This is consistent with expectations given the broader economic backdrop and evidenced by the fall in the average level of investable assets (£128,000 in 2023, versus £164,000 in 2021).
· A clear majority of investors want at least some of their portfolio to have an ESG focus. On average, those surveyed wanted over 60% of their portfolio to have an ESG focus, compared to 50% in 2021. Performance remains the most important consideration when investing in ESG-focused investments, but personal factors have become more important.
UKSPA Chairman, Zak de Mariveles, comments:
“Since we first started conducting our research into the needs of UK investors in 2017, we’ve documented a consistent trend in the increased use of structured products across all types of investor, from the least experienced to the most knowledgeable. And all evidence points to this trend continuing into the future, as investors seek solutions that can protect their capital and generate returns even when markets are falling.”