Hight net wealth investors should look to increase risk of portfolios, says banking exec
High net wealth investors should be looking to again increase the risk of their portfolios, satisfied the worst of the global financial crisis is over, JP Morgan private banking EMEA CEO Pablo Garnica told Arabian Business.
Speaking during a visit to Dubai, Garnica said the appetite for higher risk investments had returned, including in regions still considered in financial difficulty.
“I think we’re back in a world where it’s important to be invested,” he said.
“In the past year people were very conservative when they were talking about investment... and that made some people sit on the sidelines. [But now] it’s very important to be invested – obviously the right way, it doesn’t mean that you need to be ultra aggressive, you need to have the right profile of risk but it’s important to be invested.
“I think the results of last year have proven [that] fact. Last year the financial markets have been pretty good and the people who were invested benefited from that.”
Garnica said JP Morgan was advising high net wealth investors to re-examine Europe.
“Today we are adding risk to the portfolios, we’ve been under weight risk,” he said.
“We were in a conservative position given events in certain markets and we were under weight in European equities last year. This year we are adding a little bit of that [back].”
Garnica said while economic woes continued in Europe as a whole, the future was becoming clearer.
“At least the agenda is clearer today, there’s less uncertainty,” he said. “If you think about last year there was a lot of uncertainty and now I think some of the very fragile countries have a more clear agenda on how to solve their problems – it will not happen overnight but at least I think the uncertainty is lower in the market than last year.
“But that doesn’t mean we will go into the market and invest in anything.”
European-based companies with businesses outside the continent and companies with high yields that paid dividends were recommended.
Garnica said the Middle East had continued to grow in the private banking space and was a priority region for JP Morgan.
“We’re very opportunistic about the growth of the business in the region,” he said. “The Middle East is an important place for JP Morgan, not only for private banking [but also] for all lines of the business.”