Just ran across an interesting article that claims "despite an array of alternative investments, ultra-high-net-worth investors are looking to time-tested mutual funds." Here are the details:
"Although the wealthiest Americans are able to use alternative investments, they have been increasingly turning to mutual funds, according to a recent study from Spectrem Group. The research revealed that mutual fund usage has doubled from 6% of investable assets in 2003 to 12% in 2005.
"As financial services firms have worked to provide exciting alternative investments for their wealthiest clients, these investors have chosen to put their money into a far more time-tested vehicle: mutual funds," says George H. Walper Jr., president of Spectrem. "Ultra-high-net-worth investors are still somewhat gun-shy about accepting greater risk and are managing their market exposure in a conservative way." (Ultra-high-net-worth investors are defined as those with $5 million or more in net worth.)"
A couple of comments:
First, I'm surprised. I would think that people with $5 million plus would be in all sorts of unique investments available only to them.
Second, it's only 12% of their total investments -- it's not like it's 50% or anything.
Still, it's an interesting trend.
Even more interesting, why mutuals and not just an index fund?
Posted by: jim | August 03, 2005 at 04:40 PM