Investment

Global HNW Offshore Investment Drivers & Motivations, 2020 – 32.5% of HNW Wealth is Invested Outside One's Country of Residence – ResearchAndMarkets.com – Yahoo Finance

Published

4 years ago

April 9, 2020

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The "HNW Offshore Investment: Drivers and Motivations" report has been added to ResearchAndMarkets.com’s offering.” data-reactid=”19″>The “HNW Offshore Investment: Drivers and Motivations” report has been added to ResearchAndMarkets.com’s offering.

This report draws on survey results to analyze the drivers behind offshore investments in the HNW space. It examines and contrasts offshore HNW investment preferences across 27 jurisdictions, providing readers with an in-depth understanding of what is motivating HNW investors to look for new homes for their wealth.

Key Highlights

At a global level, 32.5% of HNW wealth is invested outside one’s country of residence.
North American investors offshore the largest proportion of their wealth to achieve tax efficiencies (19%), but only 62% of European providers are able to advise clients on the taxation of their international assets.
32% of global HNW wealth is held via equities, 15% via bonds, and 18% via property.
Economic and political instabilities are driving 16% of global HNW wealth offshore.
Political and economic uncertainties as an offshore driver are becoming more important, now accounting for 13% of offshore investments.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The proportion of HNW individuals who invest offshore has been on the rise despite the scandals that have shaken the industry. ” data-reactid=”28″>The proportion of HNW individuals who invest offshore has been on the rise despite the scandals that have shaken the industry.

While the reasons are diverse and differ from country to country, an expectation of better returns abroad, international business interests, and local political and economic instability top the list. However, we are seeing notable differences between regions, suggesting that one strategy does not fit all.

For example, tax efficiencies as a driver for offshore investments are of particular importance in Europe and North America. This means assisting HNW investors in minimizing their tax liabilities is key in these regions. Meanwhile, in Asia Pacific business interests are a significant driver, so a well-designed business and investment banking proposition neatly integrated with standard private banking services is a must.

Reasons to Buy

Understand the global trends that are driving offshore investments in the HNW space.
Compare how HNW offshore investment drivers differ across 27 countries.
Learn why certain HNW offshore drivers are more relevant in some countries than in others and how this affects your business.
Understand how to react to the constantly changing tax environment and adjust your offshore proposition accordingly.
Learn how political and economic instability affects client preferences and how global markets shape investment behavior in the HNW space.

Companies Mentioned

UBS
Investec
HSBC
Kendris
Citibank
BNP Paribas

Key Topics Covered

1. EXECUTIVE SUMMARY

1.1. HNW offshore investment is driven by a multitude of factors

1.2. Key findings

1.3. Critical success factors

2. GLOBAL TRENDS DRIVING HNW OFFSHORE INVESTMENTS

2.1. Increasingly easy access will drive offshore investments across the globe

2.1.1. A third of HNW offshore wealth is booked abroad

2.1.2. A sophisticated offshore proposition has become a hygiene factor

2.2. An expectation of better returns abroad and business interests account for a third of HNW offshore investments globally

2.2.1. HNW investors are looking for better returns abroad

2.2.2. Already the second most important offshore driver, the importance of international business interests is set to increase

2.2.3. Taken together, tax efficiencies and client anonymity are the number one driver for offshore investments

2.2.4. Other drivers include access to better investment options, local political and economic instability, expatriate money flows, and currency volatility

2.3. Significant regional differences exist in the motivations for offshore investment

2.3.1. Offshore propositions must be tailored at a country or regional level

3. DETAILED DRIVER ANALYSIS

3.1. Local market factors drive the variety in HNW individuals’ motivations for offshore investment

3.2. Driver one: HNW investors are betting on better returns offshore

3.2.1. Despite a desire to capitalize on returns abroad, HNW investors are taking a more careful and diversified stance

3.2.2. Investors who look for better returns abroad are biased towards the US

3.2.3. Chinese HNW investors look for returns abroad in the property space, but tensions with the US will affect booking center preferences going forward

3.3. Driver two: Business interests as a driver for offshore investments means offering hedging products is a must

3.3.1. Targeting Japanese HNW entrepreneurs requires a sophisticated offshore proposition

3.3.2. Increasing business dealings with the US will see more Taiwanese HNW wealth flow offshore

3.4. Driver three: Political and economic uncertainty

3.4.1. Economic factors are marginally more important than political ones as an offshore driver

3.4.2. Political instability remains an important driver for offshore investments in Europe

3.4.3. Political and economic instability are also major concerns in South Africa

3.4.4. Providing access to safe havens is paramount in countries where economic and political stability rank highly

3.4.5. Hong Kong seeks to defend its safe haven status amid economic and political unrest

3.5. Driver four: Access to a broader and better range of investments is also an important consideration in the offshoring decision

3.5.1. Domestic market sector concentration bias drives offshore investment in the developed world

3.5.2. Access to a broader range of investment options is also an important driver in markets with limited investment options

3.6. Driver five: The desire for tax efficiency represents an opportunity, but achieving anonymity is becoming increasingly challenging

3.6.1. With a few exceptions, the importance of tax efficiency and client anonymity as an offshore driver go hand in hand

3.6.2. Compliance is becoming an increasingly big headache, but technology can assist

3.6.3. The US and fake residency information are the biggest issues facing CRS

3.6.4. Tax efficiencies are a major driver in the UAE despite the lack of income taxes

3.7. Other drivers: The importance of currency volatility, geographic diversification benefits, and expat money flows vary across markets

3.7.1. Players looking to attract offshore HNW wealth should highlight the benefits of geographic diversification, while smaller companies should promote funds

3.7.2. Expat flows are an important driver in countries with high immigration rates

3.7.3. Currency volatility as a driver for offshore investments is becoming more important

4. APPENDIX

4.1. Supplementary data

4.2. Abbreviations and acronyms

4.3. Definitions

4.3.1. Affluent

4.3.2. CRS

4.3.3. HNW

4.3.4. Liquid assets

4.3.5. Mass affluent

4.3.6. Residency

4.4. Methodology

4.4.1. The 2019 Global Wealth Managers Survey

4.4.2. The 2018 Global Wealth Managers Survey

4.5. Secondary sources

For more information about this report visit https://www.researchandmarkets.com/r/iwfwyq

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Contacts

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Laura Wood, Senior Press Manager
press@researchandmarkets.com
For E.S.T Office Hours Call 1-917-300-0470
For U.S./CAN Toll Free Call 1-800-526-8630
For GMT Office Hours Call +353-1-416-8900

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Economy

Energy stocks help lift S&P/TSX composite, U.S. stock markets also up

Published

2 hours ago

September 17, 2024

Anne Joseph

TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.

The S&P/TSX composite index was up 34.91 points at 23,736.98.

In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.

The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.

The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.

The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.

This report by The Canadian Press was first published Sept. 17, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

S&P/TSX gains almost 100 points, U.S. markets also higher ahead of rate decision

Published

4 days ago

September 13, 2024

Anne Joseph

TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets climbed to their best week of the year.

“It’s been almost a complete opposite or retracement of what we saw last week,” said Philip Petursson, chief investment strategist at IG Wealth Management.

In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.

The S&P/TSX composite index closed up 93.51 points at 23,568.65.

While last week saw a “healthy” pullback on weaker economic data, this week investors appeared to be buying the dip and hoping the central bank “comes to the rescue,” said Petursson.

Next week, the U.S. Federal Reserve is widely expected to cut its key interest rate for the first time in several years after it significantly hiked it to fight inflation.

But the magnitude of that first cut has been the subject of debate, and the market appears split on whether the cut will be a quarter of a percentage point or a larger half-point reduction.

Petursson thinks it’s clear the smaller cut is coming. Economic data recently hasn’t been great, but it hasn’t been that bad either, he said — and inflation may have come down significantly, but it’s not defeated just yet.

“I think they’re going to be very steady,” he said, with one small cut at each of their three decisions scheduled for the rest of 2024, and more into 2025.

“I don’t think there’s a sense of urgency on the part of the Fed that they have to do something immediately.

A larger cut could also send the wrong message to the markets, added Petursson: that the Fed made a mistake in waiting this long to cut, or that it’s seeing concerning signs in the economy.

It would also be “counter to what they’ve signaled,” he said.

More important than the cut — other than the new tone it sets — will be what Fed chair Jerome Powell has to say, according to Petursson.

“That’s going to be more important than the size of the cut itself,” he said.

In Canada, where the central bank has already cut three times, Petursson expects two more before the year is through.

“Here, the labour situation is worse than what we see in the United States,” he said.

The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.

The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.

The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.

— With files from The Associated Press

This report by The Canadian Press was first published Sept. 13, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

S&P/TSX composite down more than 200 points, U.S. stock markets also fall

Published

2 weeks ago

September 6, 2024

Anne Joseph

TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.

The S&P/TSX composite index was down 239.24 points at 22,749.04.

In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.

The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.

The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.

The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.

This report by The Canadian Press was first published Sept. 6, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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