High-net-worth women are turning to non-traditional investments as they look to generate income, drive capital growth, and achieve portfolio diversification, according to findings from Investing Outside the Box, a study on trends in non-traditional investing from MainStay Investments.
These are among the latest findings from "Investing Outside the Box", a study on trends in non-traditional investing from MainStay Investments, a New York Life company and Barron’s Top Fund Family*. The study was conducted by Harris Poll among a nationally representative sample of more than 800 high net worth investors ages 40-65.
"While all investors are growing more aware of the value of non-traditional investments, high net worth women are especially interested in the benefits alternatives offer," said Stephen Fisher, president of MainStay Investments. "For advisors, this trend presents a tremendous opportunity to help high net worth women achieve their investment goals while properly diversifying their portfolios."
High Net Worth (HNW) Women Becoming More Favorable Toward Alternatives
- Of HNW women and men already invested in alternatives, women have a higher allocation to non-traditional investments than men (27% vs. 20%).
- More than half of the women surveyed (55%) said that over the past year they have increased their allocations to alternative investments, and more than a quarter (27%) of women say that within the next five years they plan to further add to their allocation.
- More women than men see alternatives as a "mainstream" option and expect alternatives to become a core investment holding over the next 5-10 years (60% vs. 47%).
- A majority of HNW women invested in alternatives have had a positive experience (58%) and would recommend alternatives to their peers (89%).
Alternatives Help Women Achieve Their Long-Term Goals
- Three in five (59%) HNW women, when thinking about their investment portfolio, rank the achievement of a goal, such as retirement, as very important.
- 68% of women agree that as the economy continues to evolve, alternative investments may offer the best opportunity to diversify and meet their long term objectives.
- When considering making an investment in alternatives, the top considerations of HNW women include the degree of risk an investment has to offer (76%), its ability to generate return potential (72%), and past performance (70%).
They Value Professional Advice – and Act on It
- Most women look to advisors for investment ideas regarding non-traditional investments (65% vs. men at 58%).
- 41% of women who discussed alternative investments with an advisor are invested in alternatives.
- When working with a financial advisor to understand a new opportunity such as alternative investments, HNW women appreciate information about potential risks (69%), a description of how these investments work (66%), and charts on how alternatives can impact returns (52%).
"This research suggests that high net worth women should be approached as goal-oriented, savvy investors with a long-term and growing interest in alternative investments," said Matthew Leung, head of channel marketing strategies at MainStay Investments.
"There’s clearly a growing eagerness among high net worth women to explore the role of alternative investments in their portfolios, which translates into an opportunity for MainStay and the financial advisors we partner with."