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HNW Women Embrace Alts

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More high-net-worth women allocate a larger share of their portfolios to nontraditional investments than men do.

Of the HNW women and men already invested in alternatives, women have a higher allocation to them than men (27% of their portfolios on average versus 20%), according to a new look at results from MainStay Investments’ “Investing Outside the Box” research released Wednesday.

“While all investors are growing more aware of the value of nontraditional investments, high-net-worth women are especially interested in the benefits alternatives offer,” said Stephen Fisher, president of MainStay Investments, in a press release.

Of the women that currently invest in nontraditional assets, 59% said they are looking to diversify exposure. And the majority of the women surveyed (92%) said they value increased return and growth potential, strong capital growth, and principal protection when considering alternative investments.

“For advisors, this trend presents a tremendous opportunity to help high-net-worth women achieve their investment goals while properly diversifying their portfolios,” added Fisher, in a statement.

The study also found that more women look to advisors for investment ideas regarding nontraditional investments (65% vs. 58% of men), and the study also found there are several things HNW women want when working with a financial advisor to understand a new opportunity such as alternative investments.

According to MainStay, “HNW women appreciate information about potential risks (69%), a description of how these investments work (66%), and charts on how alternatives can impact returns (52%).”

Over the past year alone, more than half of the women surveyed said they have increased their allocations to alternative investments. And 89% of the women who have invested in alternative investments say they would be willing to recommend them to their peers.

And, as Matthew Leung, head of channel marketing strategies at MainStay, mentions in a statement, these women are becoming more and more favorable toward alternative investments.

“This research suggests that high net worth women should be approached as goal-oriented, savvy investors with a long-term and growing interest in alternative investments,” said Matthew Leung, head of channel marketing strategies at MainStay Investments, in a press release. “There’s clearly a growing eagerness among high net worth women to explore the role of alternative investments in their portfolios.”

Their eagerness is evident in the fact that more women (60%) than men (47%), according to MainStay, see alternatives as more of a “mainstream” option and a core investment holding in 5-10 years. Nearly a quarter (27%) of the women surveyed said they plan to further add to their alternative asset allocation within the next five years.

A majority of the women surveyed (68%) said they believe alternative investments may offer the best opportunity to diversify and meet their long-term objectives as the economy evolves over the years.

The study was conducted from Oct. 24 to Nov. 11, 2013, via an online survey by Harris Poll among a nationally representative sample of more than 800 high-net-worth investors ages 40-65 with at least $1 million in investable assets.

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