A third of the UK’s leading wealth managers have warned they are holding cash across client portfolios in anticipation of a market correction.
A survey of 45 UK-based wealth managers who collectively manage over £100 billion (€111.6 billion) by Legg Mason Global Asset Management (LMGAM) found that 32% said they are holding cash across clients’ portfolios to protect against a correction.
Wealth managers were concerned that the market had “got ahead of itself” but whilst ensuring they had some level of protection, they remained positive overall in their attitude to risk.
In total, 39% said they were somewhat optimistic when it came to risk and a further 30% said they were optimistic. Only 1% of those surveyed were very optimistic.
Alex Barry, head of UK sales at LMGAM, said the results showed the dilemma wealth managers currently face.
“Having seen so many assets appreciate meaningfully throughout 2017, it is understandable wealth managers may be adding some protection to portfolios now.”
He added: “Nonetheless, with interest rates near record lows, the environment remains supportive for investors keen to take some risk to achieve a return above cash, and we could see a continuation of the current trend for some time to come.”
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