Italian investors are seeking more and more flexible investment and decorrelation in their portfolios, according to a Legg Mason’s survey.
In the light of markets’ volatility in recent months, 31% of Italian investors over 40 increased portion of cash/cash equivalent in their portfolio, while 30% looked for more flexible and unconstrained investment solutions and 12% increased the proportion of alternative investment.
Looking at bond investments, considering low interest rate environment, 26% of investors over 40 increased diversification in corporate and sovereign bonds, while 19% sought for more flexible and unconstrained investment solutions, and 16% reduced the slice of bond investments by increasing investments in equities. 11% of investors over 40 invested more in higher risk but also higher returns sectors.
On the other hand, 22% of millennials invested more in higher risk but also higher returns sectors, 18% sought more flexible and unconstrained investment solutions as well as 18% reduced the slice of bond investments by increasing investments in equities, while 17% raised diversification in corporate and sovereign debt bonds.
What are the solutions that better work in this new environment? Investors over 40 say guaranteed capital solutions (39%), solutions able to protect against possible inflation risks (22%), investment strategies not related to benchmarks (12%), more decorrelated approaches (11%).
Guaranteed capital solutions are also the first choice of Millennials (28%), 27% of them favours solutions able to protect against possible inflation risks, 20% investment strategies not related to benchmarks and 12% more decorrelated approaches.
Both mature investors (41%) and millennials (37%) agree on a fact: the simple diversification is no longer suffice, it must be added to greater decorrelation.
“Market has changed, so investment solution must change and evolve”, said Marco Negri, country head Italy at Legg Mason.
“The survey shows Italian investors’ preference towards flexible, unconstrained strategies. They no longer simply seek diversification, but greater decorrelation in their investment portfolio”, Negri said.