Investors - MARCH 10, 2015

Energy remains a favored investment for high-net-worth investors

by Drew Campbell

High-net-worth investors favor an “all of the above” approach to investing in energy, according to Morgan Stanley Wealth Management’s semi-annual Investor Pulse Poll, a survey of U.S. investors with assets of $100,000 or more, including one-third with more than $1 million. Morgan Stanley surveyed 1,008 investors in the fourth quarter of 2014.

“These investors see a mix of traditional and alternative energy sources as being the top investment prospects for 2015, including natural gas (76 percent), solar (61 percent), petroleum (53 percent) and wind (52 percent),” Morgan Stanley notes. “While almost twice as many investors favor expanding development of alternative energy sources (58 percent) over traditional sources (29 percent), they are bottom-line focused when it comes to their own portfolios. Rate of return is cited by 91 percent as the top consideration when making an energy investment. However, they say energy independence (72 percent) and environmental impact (67 percent) are also significant considerations.”

Energy was the top investment sector for 69 percent of survey respondents, behind technology (87 percent), biotech (75 percent) and pharmaceuticals (71 percent), and ahead of healthcare (65 percent), tourism (33 percent), entertainment (32 percent), insurance (31 percent) and consumer discretionary (26 percent).

“When considering where to put their money in 2015, high-net-worth investors far and away favor the United States (74 percent), followed by Japan (42 percent), India (40 percent) and China (38 percent),” the survey notes. “High-net-worth investors will allocate 44 percent of their investment portfolios to equities in 2015, and that allocation is even higher for millionaires (49 percent). These investors see the remainder of their portfolios split roughly equally between cash (21 percent), fixed income (18 percent) and ‘other’ investments (17 percent).”



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