The diversification challenge: Increasing exposure
Despite their stronger interest in investing, Latin Americans lag behind other regions in diversifying across asset classes and geographic domiciles.
Further access to education on the opportunities available could help investors' money work harder for them.
59% of global savings and investments are held in cash, but the figure is higher in Latin America – 62%.
How else are Latin Americans’ portfolios allocated?
Moreover, most Latin Americans invest in domestic products focused on local markets, but they should be aware of the numerous diversification opportunities available through international exposure. Below, see the varying proportions different exposures have in Latin American portfolios.
Although a minority of investors have international exposure of any kind, there is a strong appetite: 72% of Latin American investors are interested in gaining international exposure.
While offshore investing accounts for only 8% of investors’ assets, it is of growing demand for investors in Latin America.
What motivates the Latin Americans who invest in offshore products to do so? By a wide margin, investors are attracted by offshore accounts’ ability to provide better returns and access to greater diversification among product and exposure while minimizing the impacts of tax.
While investors are recognizing the benefits of offshore and international investing, they need further guidance on how to better reap the benefits that these products have to offer. As can be seen below, education through online channels – such as courses, tools, and information on banks’ websites – is cited to be most helpful.