Over half of investors will look towards property to improve portfolio diversification and increase returns in retirement.
- Two-thirds of investors have already expanded their portfolio through non-traded assets to protect against market volatility
- Stocks and bonds have lost popularity in favour of property and private equity
- 25% of investors aim to add more non-traded alternatives to their portfolios before 2020
Property is the most widely sought-after asset class for investors looking to improve portfolio diversification and risk-returns in retirement, a report by PENSCO found.
Those with an Individual Retirement Account (IRA) are looking towards non-traded alternatives as they experience fewer hurdles and have a greater understanding of how to use an IRA to invest in alternative asset classes.
PENSCO’s findings echo an earlier report conducted by the Office of National Statistics, where 44% of respondents felt that property gave them better money-making opportunities in retirement than a traditional pension.
52% of investors stated they were likely to increase their retirement portfolio allocation to property, ranging from single family investment property to non-traded REITs, and a quarter were likely to increase their allocation to private equity, including investment in a start-up or a fund.
Kelly Rodrigues, Chief Executive Officer at PENSCO, said: “Real estate is popular among self-directed IRA clients because of its potential for income generation and hedging against inflation, while private equity offers investors with long investment horizons and the potential for growth.”
Two-thirds of respondents have already increased their investments into non-traded alternatives or plan to do so, stating that market volatility with traditional stocks and bonds doesn’t offer enough security in retirement. 32% of new accounts created at PENSCO have already chosen to invest in property, thanks to its track record for growth and ability to provide a regular, stable income during retirement.