Single asset funds “unappealing” for majority of individual investors – survey

More than two thirds of investors (69%) believe that the high-risk and high-reward characteristics of single asset funds makes them unappealing, according to a survey for the UK’s Prudential.

The research, covering more than 1,000 individual investors, was designed to assess what investors are looking for in financial products and how they make their investment decisions.
Recognising and trusting a provider’s brand name was considered important by 89% of respondents. Other positive factors included expert monitoring of fund managers’ performances which was important for 52% of respondents, and investment security rather than headline returns for 51%. Some 50% of investors preferred funds to be actively rather than passively managed.

On the choices of products, 90% of investors rated the opportunity to invest in multiple asset classes as “appealing” or “very appealing”, 83% of investors appreciated the ability to change their risk profile and 70% favoured smoothing, a method to reduce the impact of wide fluctuations in the value of investments.

Prudential investment director, Andy Brown, said: “The research shows that access to several types of asset classes, pro-active asset allocation and the flexibility to change their acceptable level of risk are features that the vast majority of customers rate positively. When all these things are considered, it points to increased demand for multi-asset products because of the flexibility and greater number of options they offer.” 

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