As much as 80% of Saudi Arabia's high-net worth individuals (HNWIs) population views commodities as a safe investment proposition, a far greater proportion than any other market included in a recent study.
According to the 13th volume of Barclays Wealth's insights report, titled, 'Risk and Rules: The Role of Control in Financial Decision Making', Saudi is the only country in West Asia where all respondents expressed strong views on the risk factor of commodities, in stark contrast to other markets where up to 12% of investors had no particular opinion on commodities.
In line with the fact that Saudi investors view them as safe, 62% of investors are currently invested in commodities, higher than any other country included in the global survey.
Barclays Wealth is the wealth management division of Barclays.
Additionally, the report revealed that 94% of Saudi HNWIs consider investments in real estate to be safe over the next 12 months, further validating their tendency to invest in illiquid assets to avoid impulsive investment decisions during market volatility.
As for cash and alternative investments, over 60% of Saudi HNWIs view investment in cash as risky, while only a minority (24%) find it safe. Among all respondents surveyed, less than 20% currently hold cash investments.
HNWIs in Saudi revealed a mixed attitude toward investment in alternative strategies: one half (50%) consider them safe, while the other half (48%) sees alternative strategies as risky.
Results also show that 66% of Saudi investors find developed market equities safe, making them a more preferable investment choice over emerging market equities. Half of all respondents (50%) consider investment in emerging market equities risky for the next year.
The report, which is the 13th edition of the Barclays Wealth Insights series, is based on a global survey of more than 2,000 HNWIs and provides an in-depth examination of wealthy investors from a behavioural finance perspective.
In addition to considering the different financial personality traits that exist amongst wealthy investors, the report shows their views on nine main asset groups: real estate, cash, alternative strategies (long/short funds, arbitrage, etc), equities from both developed and emerging markets, bonds from developed governments, blue-chip corporations and high yield/emerging markets and commodities.