Many European individual investors surveyed cannot explain what income investing is, JP Morgan Asset Management (JPMAM) has found.
Describing the results as "concerning", JPMAM surveyed nearly 5000 individual investors with significant investable assets and found 67% claimed to be seeking some form of income, yet 52% could not correctly explain the meaning of the term "income investing". Amongst those who say they are not currently investing in income, the majority (61%) would like to know more about how they can generate income in their portfolios.
Massimo Greco, head of European funds at JPMAM, says: "As investors grow more open to seeking income opportunities outside their home countries there is a clear opportunity for financial advisers to provide greater education and insight with regard to income investing."
Across Europe, just over half of investors are seeking a combination of income and growth. A third focus on seeking growth, versus just 13% focused on generating income.
The list below reveals some of the main characteristics of individual markets.
Netherlands: Growth, least concerned about low yields, mutual funds most popular
UK: Growth, but income is important, concerned about low yields, savings most popular, most likely to re-invest income
Italy: Income, some concern about high inflation, mutual funds most popular, most likely to reinvest income
Germany: Both, some concerns about higher inflation, mutual funds most popular, most likely to spend income
Spain: Both, concerned about low yield
Switzerland: Both, most familiarity with income, savings most popular, most likely to spend income
Sweden: Least concerned about low yields, mutual funds most popular, most likely to reinvest income
France: Most familiarity with income, insurance plans most popular
Investors in France and Italy are most likely to have been approached by their financial advisers about income investing. Conversely, few advisers in Belgium, the Netherlands, Sweden and the UK are raising the topic of income investing with their clients.
"There is a clear opportunity for financial advisers to engage with clients, as many investors do not have a good understanding of the range of income producing products available to them," says Greco.
JPMAM's research is based on 4,805 investors across nine European countries with a minimum of €20,000 in investable assets. A weighted European benchmark was created to allow for easy country comparison.
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