Market jitters? Wealthy Australians using alternatives to diversify portfolios
Australian investment platform Stropro says its rapid growth, with $100 million in inflows in three years, signifies a growing trend towards alternatives among high-net-worth investors (HNWI).
Some 75% of Stropro’s growth has occurred in the last 12 months, as advisers and HNWIs seek ways to diversify investment portfolios, due to the continuing volatility in equity and bond markets globally.
Australian investors are lagging behind the rest of the world when it comes to alternatives with, on average, only 10-12% of alternatives weighted in portfolios.
“In the US and Europe, ultra-high-net-worth investors allocate more than 50% of their total assets in alternatives,” Stropro Chief Executive Officer Anto Joseph said today.
“The use of structured investments and alternatives is commonplace.”
Ben Streater, Stropro’s Chief Investment Officer, says he believes Australians are lagging behind in alternatives due to an issue of access.
“I don’t think it’s the case that Australian investors have been hesitant to diversify. Many HNWIs have just lacked access to alternatives like structured products in the local market. This access is the problem that Stropro solves for, and investors are responding very favourably,” said Streater.
Stropro provides access to investment instruments issued by several major banks — including Citi, Macquarie Bank, BNP Paribas, Marex, Société Générale and Natixis — through its online platform, offering access to HNWIs that has been available to wealthy investors overseas for some time.
“In Australia, most wealth is directed to investments through wealth managers, accountants, or self-management, rather than through private banks. Stropro’s platform is a game changer because it offers easy access to a range of curated institutional products from around the globe — either self-directed, or through an adviser using the platform — without fundamentally changing how Aussies like to invest,” Joseph said.
Streater says structured products are increasingly appealing to advisers and HNWIs in markets like this because of the ability to select investments aligned with specific objectives, such as defined income and growth objectives.
“The fact that structured products can offer reliable, expected returns, capital protection, and downside risk management, makes them attractive from a diversification and portfolio optimisation perspective. In essence, they allow advisers to build resilient and diversified portfolios in line with their clients’ specific investment objectives,” said Streater.
Read more - Stropro, a young but rapidly-growing fintech, has reached a milestone of $100 million in total inflows in a short space of time.
Image - Stropro’s four founders — Abraham Robertson, Ben Streater, Rob Nicholls, and Anto Joseph
