UK investors believe they have a better chance of achieving their expected returns by investing in cryptocurrencies compared to speaking with a financial adviser.
The Schroders Global Investor Study 2023 found that 37% of UK investors put their faith in cryptos, whereas 31% would talk to an adviser.
Coming in at joint second at 36% was to save more and spend less and make higher risk investments.
This was followed by investing in cyclical stocks (35%) and borrowing more money (34%).
The study also found more UK investors are turning to cash due to a background of rising uncertainty caused by higher inflation and the geopolitical situation.
The same amount of investors (40%) now holding cash is the same level as those holding active investment/mutual funds.
Only 14% are holding non-actively managed investments.
Despite higher interest rates, UK investors still hold significant return expectations.
The minimum level they would like to receive is 8.2%, with the level of income people realistically expect to receive at 8.5%.
Also, the majority of UK investors (79%) believe that we are witnessing a new regime of market and policy behaviour, with 86% changing their investment strategy as a result of rising inflation and elevated interest rates.
Globally, the importance of active management for numerous investors was apparent while private assets were seen as an essential diversifying tool.
Over a third (34%) said sustainable funds are likely to offer higher returns with the proportion of investors avoiding sustainable funds due to performance concerns has fallen by half compared to the same survey last year.
Schroders head of wealth UK client group Doug Abbott said: “The regime shift in inflation and rates is impacting how investors think about their portfolios, with many clearly allocating to cash investments as a result.
“However, with investors expecting to achieve returns of 10.5% per annum over the next five years, it is clear they will need to allocate their portfolios to a range of asset classes to achieve their objectives.
“The long-term structural trends of demographics, de-globalisation and de-carbonisation all point to inflation remaining higher than it has been for the last decade and long-term investing will be critical.”
Schroders group chief investment officer and co-head of investment Johanna Kyrklund said: “In an investment landscape being increasingly shaped by the ‘3Ds’ of deglobalisation, decarbonisation and demographics, investors are still getting used to the fact that higher inflation and higher interest rates are here to stay.
“Every asset has had to reprice to compete with a yield on cash in the bank. Valuation matters once again.
“Compared to the last 15 years, you may now need to be more flexible and active in the way you invest.
“The results of the study show that some investors are adjusting quicker than others.”
Schroders spoke to 23,000 investors who invest from 33 different locations around the globe to obtain these results.
