Advisers expect greater volatility over the next 12 months

Just under half (45 per cent) of advisers have predicted worsening volatility over the coming year, according to research published by TIME Investments.

The long income property and inheritance tax (IHT) planning specialist found that advisers reported that the volatility of equities will be greater, with European equities cited as the most volatile for 55 per cent of advisers, followed by UK equities (48 per cent). Following in suit, advisers predicted corporate bonds and US equities volatility will also worsen at 42 per cent and 31 per cent respectively.

The firm found the concerns over volatility and increasing risk are reflected in the sentiment observed among clients, with almost half (49 per cent) “very nervous” of investing in equities or are keen to de-risk their investment portfolios.

When considering lower-risk investments, 42 per cent of advisers have recommended cash, followed by long income property (26 per cent), alternative investments (25 per cent), bonds (25 per cent), real assets (23 per cent) and structured products (22 per cent).

TIME Investments highlighted that these investments offer a low correlation, defensive income strategies, secure income streams, investing for growth, IHT mitigation and inflation-linkage.

Commenting, TIME Investments senior business development manager Henry Dovland said: “It is likely that market volatility is here to stay for some time. This is having an impact on investor sentiment and attitudes to risk. As a result, advisers are recommending investments with features such as defensive investment strategies and secure income streams, which are less volatile and aim to provide greater certainty of income than equities.”

On long income property, the firm underlined that the asset class provides greater certainty of income, therefore reducing volatility.

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