A third of the UK’s top wealth managers are holding cash in their clients’ portfolios as a source of protection, according to a survey by Legg Mason Global Asset Management.
Among the respondents, who collectively manage over £100bn, 32 per cent said a market correction is on the cards and are overweight cash.
However, overall the majority of managers are positive in their attitude to risk, with 39 per cent somewhat optimistic, 30 per cent optimistic and 1 per cent very optimistic. Of the more bearish managers, 23 per cent are somewhat pessimistic and 6 per cent are pessimistic.
The managers also have a sanguine outlook on the investment opportunities available, with 44 per cent somewhat optimistic about investment opportunities in the coming year and a further 37 per cent optimistic.
Alex Barry, head of UK sales at Legg Mason Global Asset Management, says the results suggest wealth managers are in a quandary.
“Having seen so many assets appreciate meaningfully throughout 2017, it is understandable wealth managers may be adding some protection to portfolios now,” he says. “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.”