DIY investors unhappy with self-made returns

DIY investors unhappy with self-made returns

More than a third of investors with more than £100,000 in net-investible wealth are disappointed at how their wealth grew over the past year, YouGov research reveals.

The research, which is extracted from YouGov's database of 250,000 panellists, found 34 percent of wealthy investors were disappointed with growth, 30 percent 'slightly satisfied', 26 per cent neither satisfied or disappoint and 9 per cent very satisfied.

Furthermore if found that 57 per cent of those surveyed managed all financial products and investments themselves, with only 9 per cent handing the running of all assets to professionals and 23 per cent doing some themselves and giving some to professionals to run.

The survey indicated that 37 per cent of those who manage all their financial products themselves are disappointed with the growth of their wealth over the past year, with the same percentage (37 per cent) for those that manage some products themselves while leaving some to be run by professionals.

Stephen Harmston, head of YouGov Reports,  said: “By reaching those who currently manage all their financial products themselves, there is a real opportunity for wealth management services.

"Many of those currently taking matters into their own hands are disappointed with how their wealth is growing, meaning they could well be open to alternative strategies.”

The YouGov figures are being attributed to the failure of active equity portfolios versus a straight bet on a FTSE100 tracker fund, by discretionary fund manager Brooks Macdonald.

Edward Park, director of the investment committee at Brooks Macdonald, said: "In recent years a balanced portfolio would have beaten the FTSE 100 however that was not the case in 2016.

"In 2016 if you bought the FTSE100 you effectively had a short position in sterling and you had huge beneficiaries from BP and Royal Dutch Shell which rallied hugely, whereas most active funds had underweight positions to energy or resources." 

The extra weighting active managers had to FTSE250 companies also hurt them as FTSE100 companies were bigger beneficiaries of the fall in sterling after the UK voted to leave the EU.

Replicating such returns from the FTSE100 will be much harder, Mr Park warned.

"If you buy the FTSE100 now you are making a bet that sterling will decline further and given how cheap it looks compared to other currencies on a basket basis that is quite a bold position to have," he said.