A survey conducted by Legg Mason among more than 5,000 investors has found UK-based high net worth investors are the most cautious in Europe, with more than a third of their portfolios invested in cash.

On average, older UK investors (aged 40-75) have cash weightings of more than 36% in their portfolios, in a bid to protect themselves from current market volatility, according to the 2016 Legg Mason Global Investment Survey.

These numbers exceed those of any other country in Europe, as well as the European average of 28%.

The survey, which polled more than 5,370 high net worth investors across 19 countries, also found UK investors had generally trimmed their allocation to risk assets to raise cash.

The average exposure of older UK investors to real estate, for example, currently stands at 13, lower for than Germany at 30%, and France at 23%.

Age-wise, older UK investors also have a lower average allocation to fixed income at 13%, compared to the European average at 14%.

Average exposure to gold and non-traditional investments is also lower for UK investors, at just 2% and 1% respectively, versus the European averages of 3% and 4%.

However, while older UK investors reduced their equity allocation from 31% last year to 29%, their average weighting in equities remains higher than their European peers, who are investing 26% on average in the stockmarket.

Millennial UK investors (aged 18-39), are happier to allocate more capital to risk assets, according to the survey

Their average allocation to cash is 20%, compared to the European millennial average of 23%, while they also have above-average allocations to non-traditional investments, at 13% compared to 10% in Europe.

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Both younger UK and European investors allocate 9% on average to gold, but a UK investors hold more fixed income in portfolios at 19% compared with 15% in Europe.

However, the average younger UK investor has a lower allocation to equities and real estate, at 16% and 18% respectively, versus the European millennial averages of 17% and 20%.

“It is perhaps unsurprising that, due to their relative youth, millennials have a significantly lower weighting to cash, although notably their allocation to equities is not only below their European peers, but far below their older UK counterparts,” said Adam Gent, head of UK sales at Legg Mason.

“With their portfolios more evenly allocated across asset classes, it appears UK millennials are happier to diversify into areas such as non-traditional investments in order to spread risk, rather than lean so heavily on traditional areas like equities.”

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