Investors around the world are holding a relatively high level of cash in anticipation of global turmoil in 2020, according to UBS Global Wealth Management.
A majority of investors expect a significant drop in markets before the end of next year, and 25% of their average assets are currently in cash - far higher than the roughly 5% that UBS recommends on average - according to a survey of more than 3,400 HNWIs with at least $1m in assets.
Uncertainty from the trade conflict, Brexit and the upcoming US presidential election may have boosted cash's appeal with the wealthy.
The rapidly changing geopolitical environment is the biggest concern for investors around the world"
Almost eight in ten feel markets are moving towards a period of higher volatility, and more than half expect a significant drop in the markets at some point in the new year. As a result, the report said, 52% are unsure if now is a good time to invest; nearly three in four investors say the investment environment is more challenging than it was five years ago. The majority (58%) feel less in control of their portfolio's performance than they used to be.
"The rapidly changing geopolitical environment is the biggest concern for investors around the world," said Paula Polito, client strategy officer at UBS GWM, in a statement.
"They see global interconnectivity and reverberations of change impacting their portfolios more than traditional business fundamentals, a marked change from the past.
Globally, 44% of investors are highly worried the US-China trade conflict will impact their portfolios in 2020. While only 40% of investors in Asia are concerned about US-China trade conflict, in the US and EMEA, that figure rises to 45%.
According to the UBS report, 83% of UAE investors think that geopolitics are driving markets more than business fundamentals.