Almost nine in 10 (89 per cent) investors believe inflation presents a risk to their portfolio performance, research from RAW Capital Partners has found.
The research, which surveyed 756 UK-based investors with investments worth more than £25,000, found that 89 per cent of respondents identified inflation as a high or moderate risk to their investments.
This was the most commonly identified threat, ahead of slow economic recovery, which was mentioned by 88 per cent, and geopolitical conflict like the wars in Ukraine and Gaza, mentioned by 87 per cent.
RAW Capital Partners interim managing director, Ben Nichols, acknowledged that, globally, economies have been struggling with the impact of high inflation for some time.
“The action that central banks like the Bank of England have taken to bring it down has made it extremely difficult for any meaningful economic growth,” he added.
“This has clearly taken its toll on investors, with inflation remaining a major risk in their eyes, while a slower-than-hoped economic recovery in the UK is evidently another concern."
Lower on the list, 82 per cent see high interest rates as a risk to their investors, while the US presidential election and climate change are also considered to pose a notable risk to UK investors’ portfolio, mentioned by 81 per cent and 79 per cent respectively.
Nichols additionally stated that a “surprising” finding in the research was how highly many of the risk factors scored.
“Most analysts and economists now suggest that the global economy has turned a corner, but our research suggests there remains a broad and pervasive anxiety among investors towards the current and future state of the investment landscape,” he explained.
With this in mind, Nichols advised that investors must recommit to implementing robust risk management strategies to protect their investments against any volatility that these risk factors could produce.
“This means constructing balanced and diversified portfolios that are resilient enough to weather economic uncertainties, thereby enabling investors to stay on track with their long-term investment objectives,” he added.
tom.dunstan@ft.com
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