In the poll of over 4000 investors around the world it emerged that inflation is the number one fear among them globally with 49% pointing to it as a major risk to their investment progress. However the picture varies significantly across countries and regions.
The most inflation-wary investors are located in Latin American and Asian nations, the survey found. Over 60% of respondents in Brazil cited inflation as their single biggest worry, with Mexico not far behind at 58%, China at 56%, Singapore at 53% and Taiwan at 51%.
This is in stark contrast to continental Europe where inflation is seen as a major worry by a minority of investors. Only 11% of France-based investors pointed to inflation as a big concern, 14% in Sweden, 18% in Switzerland and 22% in Spain.
UK and US investors represent the middle ground in this context with 35% of those in the UK and 36% in the US saying inflation is a serious threat to their investment prospects.
Other big worries for investors on a global basis after inflation include making poor investment decisions which 37% highlighted, low local economic growth mentioned by 33%, increasing market volatility which 32% said is a major fear, and an increasing tax burden was mentioned by 31% of respondents. Low global growth is an issue for 30% of respondents, 29% pointed to low interest rates while 29% also picked out geopolitical unrest as a top worry and 24% said the tapering down of the US stimulus is a concern.
“While there are a lot of threats out there to consider in the current environment, it is clear that inflation – particularly for Latin American and Asian investors – is by far the biggest concern,” said Matt Schiffman, Legg Mason Global Asset Management’s managing director and head of global marketing.
Schiffman also said it is noteworthy that concern about the US stimulus program winding down was not at the top end of the list given its position as a major worry among investors throughout 2013.
