Global capital seeks to ‘act locally’ in 2020 as US-China trade conflict raises investment uncertainties: survey
- Investors look for businesses relying on domestic revenues next year in a shift to avoid international headwinds
- ‘Companies focused on consumer spending are less impacted by geopolitical uncertainty,’ analyst says
Global investors plan to deploy their money next year in businesses that rely on domestic revenues, analysts say – a sign that capital is shifting to avoid the headwinds of rising protectionism as the world grows less interconnected.
Geopolitical issues are expected to drive the markets in 2020, more than business fundamentals such as revenues and profitability, according to the newly released UBS Investor Watch on the Year Ahead. The poll surveyed more than 3,400 high-net-worth investors with at least US$1 million in investable assets.
Overall, three out of four survey respondents said they found the investment environment more challenging than five years ago and close to 60 per cent planned to increase their cash reserves from an already elevated level of 25 per cent of their assets allocation. Typically, investors keep the cash percentage of their portfolios in the single digits when their risk appetite is high.
Leading concerns include the US-China trade conflict, followed by the US presidential election.
To shield themselves from geopolitical choppiness, investors are looking for domestic and consumer-oriented businesses and shying away from international operations.