Man Group to Acquire From Merrill Lynch the Investment Management Contracts of a US$2.1bn Fund of Hedge Funds Portfolio

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Man Group compra a Merrill Lynch los contratos de gestión de una cartera de 1.200 millones de dólares de fondos de hedge funds
. Man Group to Acquire From Merrill Lynch the Investment Management Contracts of a US$2.1bn Fund of Hedge Funds Portfolio

Man Group has announced that it has entered into a conditional agreement with Merrill Lynch Alternative Investments to acquire the investment management contracts to manage a portfolio of multi-strategy and strategy-focused fund of hedge with total AUM of $1.2 billion. The Acquisition is expected to complete in the second quarter of 2015, subject to certain approvals and consents, including approval of the board of managers and investors of a US registered investment company.

Man Group’s fund of hedge fund arm, FRM, has been selected to manage the Portfolio following a due diligence process which assessed its investment expertise, quality of personnel, investment process and ability to service clients. Following the completion of the Acquisition, Man Group intends to offer the funds to other investors globally as well as Merrill Lynch’s and US Trust’s wealth management clients.

The Acquisition of the Portfolio follows Man Group’s recent Acquisition of Pine Grove Asset Management LLC. The strategic rationale for the Acquisition includes:

  • Continued participation in the consolidation of the fund of hedge fund industry.
  • Further expansion of Man Group’s footprint in the US.
  • Increased commitment to the US wealth management channel.
  • Synergistic partnership allowing Man Group and Merrill Lynch to deliver high quality
  • investment solutions for clients.
  • Broadened portfolio of US registered investment companies and complementary fund of hedge fund products.
  • Expansion of FRM’s existing co-mingled fund platform and managed accounts.

The assets, which will be acquired, are spread across 17 multi manager hedge fund and managed futures fund of funds. One fund is registered as an investment company with the US Securities and Exchange Commission, while the others are private. All of the funds would complement Man Group’s and FRM’s existing product offering, with 3 multi-strategy funds and 14 strategy-focused funds. This would include emerging markets, equity long / short, global macro, relative value, managed futures and other credit-focused products.

The consideration will be paid to Merrill Lynch in cash from existing resources, and comprises: An upfront payment of $2.9 million, paid upon completion of the transaction, 35% of the net management fees generated annually by the Portfolio, payable annually for five years and the total payments under the earn-outs cannot exceed $30.0 million.

As at 31st October 2014, the Portfolio generated run rate net management fees of $6.2 million. The transaction is structured as an asset purchase and, as such, no additional costs are expected to be incurred, nor synergies generated. The regulatory capital requirement associated with the Acquisition is expected to be approximately $10.0 million.

Michelle McCloskey, Senior Managing Director of FRM, stated, “We are excited that Merrill Lynch has selected FRM as the steward of its world-class portfolio of multi-strategy and strategy-focused funds, supported by a proven distribution platform. We look forward to continuing to deliver high quality products and services to Merrill Lynch’s clients, while expanding the investor base globally as investors increasingly seek exposure to alternative investments through managers like Man Group.”

Have Equities Become Too Expensive?

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Global equities continue to offer good value, though Threadneedle beleives the case for active management has seldom been stronger given the diverging performance of regional markets and the emergence of powerful trends that are driving individual stocks.

The price to earnings ratio of global markets is currently below the average seen since 1997, which would certainly seem to suggest that equities are not overvalued.

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However, there are marked variations in terms of regions (as measured by trailing PE ratios). Surprisingly, Europe is among the more expensive markets despite its well-known problems, but if one looks at PEs on a forward basis, Europe is more attractively valued. This reflects a belief that European companies will grow earnings at a faster pace than those in other parts of the world. While the weaker euro may support earnings growth, we are concerned that expectations may not be met given the economic difficulties facing the region.

Dividend yields also provide an interesting measure of the relative attractiveness of equities around the world. Globally, sovereign bonds yields are low (below 1% in Germany and Japan, for instance), whereas dividend yields on world equity markets average around 2.5%. Not only is this yield attractive at face value, it will grow over time – making equities an attractive option for investors in a low-growth environment.

The case for US equities

Although dividend yields are relatively low in America, the picture changes markedly once you add in the impact of share buybacks. Including these, US companies are actually returning more capital to shareholders than their counterparts around the world. There are other good reasons for investing in US equities. The domestic economic recovery is continuing and the shale energy revolution is providing the US with a competitive edge in a wide range of sectors, and is boosting the country’s external finances. Meanwhile, corporate earnings growth is solid, helped by good cost management and the effective use of capital. Low interest rates will support equity valuations and we believe the main risk facing the US economy is how it reacts when interest rates start to increase.

Profit margins are at historically high levels. Threadneedle believes that they are likely to moderate in the long term, but remain high over the next few years at least given that:

  • Wage inflation is controlled and the participation rate can rise as economy improves.
  • Capital expenditure plans are conservative, with companies favouring capital returns or M&A.
  • Energy costs are particularly low in the US, reflecting the development of shale resources.

Thus, the asset management firm believes that US companies deserve their premium ratings.

Opportunities in Japan

Threadneedle is also overweight in Japan, where the government of Prime Minister Shinzo Abe appears to be succeeding in transforming the deflationary landscape of the past 20 years or so via its “three arrows” policy programme into one of inflation. Thus, we now have underlying inflation of around 1.5% in Japan, a development that is encouraging people to go out and spend rather than waiting for the price of goods to fall even further. The first two arrows – monetary stimulus via a massive programme of quantitative easing and fiscal stimulus via increased spending are already in place. Investors are now concerned that the delivery of the third arrow of structural reforms to the economy, including labour reforms, deregulation and trade agreements is making disappointing progress.

However, Threadneedle believes that investors would do better to regard the third arrow as a form of acupuncture with lots of little needle pricks taking place across the economy. Thus, Threadneedle points out that we have seen progress in a number of areas, including the ability of companies to make redundancies, and the encouragement of more women and migrants into the labour force.

There has also been significant progress in terms of corporate governance. Thus in 2013, the authorities launched a new stock index. The JPX-Nikkei 400 aims to showcase the country’s most profitable and shareholder-friendly companies and it is having a major impact. On learning that it was not in the index, the toolmaker Amada, for example, promptly announced that it would pay out half of its net profits in dividends, and use the other half to buy back stock, and improve corporate governance by appointing two independent directors. Thus, the new index is changing corporate behaviour and the third arrow is bringing about a major improvement in returns. Indeed, Threadneedle believes returns on equity can almost double over a period of three to four years as companies are increasingly run for the benefit of shareholders rather than employees.

Our overall strategy in global equities

Given the low growth environment that we envisage over the next few years, Threadneedle is focusing upon businesses which are not dependent upon a growing economy to expand their earnings. They favour companies that are fuelled by secular growth trends. These include:

  • Disney: benefitting from the rising value of differentiated media content.
  • Facebook and Google – beneficiaries of increasing advertising on the internet.
  • TE Connectivity (electronic engineering) – benefiting from the rapid growth of electronic components within cars in areas such as safety, infotainment, emission control, and fuel economy.

Overall, a positive outlook for active managers

In conclusion, there a number of reasons to be optimistic about the outlook for equities including the fact that although valuations have risen they are not high in historical terms, while cash returns to shareholders provide support. However, Threadneedle is also seeing a growing divergence in the performance of individual economies around the world and the rise of nationalism and geopolitical instability. The asset management firm believes this underscores the need for an active approach to stock picking, while the prospect of low economic growth over the next few years supports our focus on companies that are well positioned to exploit secular growth trends.

Dagong Global Will Become Sole Shareholder of Dagong Europe

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Dagong Europe has announced that its majority shareholder Dagong Global Credit Rating Co. Ltd. (Dagong Global) has completed an adjustment to the shareholding structure of the company. 

Through the adjustment, Dagong Global has acquired the 40% shares previously owned by Mandarin Capital Partners (MCP), therefore becoming the sole shareholder of Dagong Europe Credit Rating Srl (Dagong Europe).

Jianzhong Guan, chairman of Dagong Global and of Dagong Europe commented “Dagong Global’s strategy in the European rating market is to build up a new bridge that pumps up mutual investment between China and Europe and to undertake rating responsibility to guard off credit risks by providing just and authoritative rating information for Chinese investors. We believe that we will reap great fruit from the unique blueprint that caters for the historical demands of Europe. We are grateful that MCP co-founded Dagong Europe with us, and I hope that we could continue our cooperation in the future to help Dagong Europe to thrive”. Lorenzo Stanca, deputy chairman at Dagong Europe and managing partner at MCP, commented “we believe that Dagong Europe has a significant potential to become a key player in the credit rating industry in Europe. The results obtained in the first year from the obtainment of the Licence from ESMA confirm such an expectation, in a sector that is bound to see important changes and reshuffles, following years of dominance of the three big U.S. players.

Ulrich Bierbaum, general manager of Dagong Europe added, “I’m confident that the new ownership structure will provide even stronger support for Dagong Europe’s future growth plans, as we can leverage fully the internationally renowned Dagong brand. We will keep promoting the Dagong brand under Chairman Guan’s guidance by providing top-notch quality services to European issuers and Chinese investors.”

Dagong Europe Credit Rating srl (Dagong Europe) was established in March 2012 with headquarters in Milan, Italy. In June 2013, Dagong Europe received authorization and registration by the European Securities Market Authority (‘ESMA’) under the Article 16 of the CRA regulation. Dagong Global Credit RatingCo., Ltd., headquartered in Beijing, is the sole owner of the company.

Dagong Europe provides credit opinions on financial institutions including insurance companies and non-financial corporates, producing autonomously Procedures, Criteria and models that are the foundations of the credit rating process.

Dagong, the biggest credit rating agency in China, has 600 employees, including over 300 analysts with master’s and doctor’s degree, and over 50 post-doctoral researchers. Over 30 branch offices in China provide credit information services for clients at home and abroad.

Asset Managers are Turning to Index Derivatives to Mitigate Risk

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Asset managers have told TABB Group that they are focusing more attention on index derivatives as market structure changes in both OTC and cash markets are impacting their portfolio decisions. As they change the way they manage cash flows and risk exposures, index derivatives are seeing greater growth as part of the evolution of existing strategies, already generating record level volumes on multiple days in October 2014.

According to Matt Simon, a TABB principal, head of futures research and author “US. Equity Index Derivatives: The Next Phase of Institutional Discovery,” traditional drivers of equity-index based derivatives usage will persist, evolving over time with asset managers using index products to equitize cash, hedge risk, gain exposure to underlying reference markets and search for new ways to gain alpha when provided with the right opportunities. “If recent volumes during October are any signal of what to expect in 2015, the changes for increased adoption are already taking hold.”

This growth potential has not gone unnoticed. “The recent announcement by the London Stock Exchange (LSE) concerning its acquisition of Frank Russell and its lucrative index operations for $2.7 billion highlights the current appeal of owning an index business,” says Simon.

For this study, which covers market validation, the most active products, electronic order routing, brokerage routing decisions, executing brokers’ market share, trading product selection, and regulatory impact, TABB interviewed 26 firms, including long-only asset managers, hedge funds, commodity trading advisers (CTAs) and pension managers with $6 trillion in total Assets under Management (AuM), It also includes interviews with sell-side trading desks, market makers, proprietary trading firms, technology providers and exchanges, conducted during the second quarter 2014.

Top findings include:

  • 92% of long-only funds, hedge funds and CTAs say their equity index derivatives volumes will increase over the next year.
  • E-mini S&P 500 remains the most active futures contract by a wide margin with SPY the leading options index product, January-September 2014 vs. January-September 2013.
  • Nearly 60% of buy side trade through clearing broker(s).
  • For brokers, cost of execution and service levels are most important selection criteria.
  • Hedge funds and CTAs say they are interested in sophisticated trading functionality to support their derivatives activity; leading OMSs and EMSs received mixed results.

Rather than being used as a pure alpha generating tool, says Simon, hedge funds are using index products to manage the growing number of market risks. “Facing a more difficult operating environment, they’re not only being forced to improve their balance sheets and lower risk exposures, they’re being driven by pressure from their prime brokers to improve the management of their risk exposure.”

The 30-page 22-exhibit study is available for download by TABB Group Research Alliance Futures clients at this link.

New Asset Inflows into US listed ETF/ETPs were US$42.4 billion in November, Setting a New Record

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ETFGI’s research finds 2014 is proving to be a very good year for the ETF/ETP industry in the United States. The ETF/ETP industry in the United States reached a new record of US$1.98 trillion in assets at the end of November. They expect to see assets break through the US$2 trillion milestone any day.

At the end of November 2014 the US ETF/ETP industry had 1,659 ETFs/ETPs, from 68 providers listed on 3 exchanges. Net new asset inflows into US listed ETF/ETPs were US$42.4 billion in November, which is a record month, beating the previous high of US$41.2 billion set in July 2013.

The global ETF/ETP industry has reached a new record of US$2.76 trillion in assets. They expect the assets to break through the US$3 trillion milestone in the first half of 2015.

“Economic news in Europe during November was not positive with the OECD warning that Europe was the “locus of weakness” in the global economy – criticising the ECB’s efforts to combat economic stagnation. Many found the EC’s investment plan as lacking new money and new ideas with even the Pope criticising the plan. During November the US market continued its positive trend with both the S&P 500 and the Dow closing up 3% for the month. Developed markets ended the month up 1% while emerging markets declined 1%.” according to Deborah Fuhr, Managing Partner at ETFGI.

In November 2014 ETFs/ETPs listed in the United States saw net inflows of US$42.4 billion. Equity net inflows of US$41.2 Bn in November were a record month, beating the previous high of US$37.2 Bn in July 2013, followed by fixed income ETFs/ETPs with US$1.7 Bn, whilst commodity ETFs/ETPs saw net outflows of US$321 Mn.

iShares gathered the largest net ETF/ETP inflows in November with US$11.9 Bn, followed by SPDR ETFs with US$10.8 Bn and Vanguard with US$8.7 Bn net inflows. iShares is the largest ETF/ETP provider in terms of assets with US$757 Bn, reflecting 38.2% market share; SPDR ETFs is second with US$433 Bn and 21.8% market share, followed by Vanguard with US$421 Bn and 21.3% market share. The top three ETF/ETP providers, out of 68, account for 81.3% of US ETF/ETP assets, while the remaining 65 providers each have less than 5% market share.

 

Morgan Stanley Launches The Institute of Family Wealth Management

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Morgan Stanley lanza un nuevo instituto de gestión patrimonial familiar
Wikimedia CommonsPhoto: Jenix89. Morgan Stanley Launches The Institute of Family Wealth Management

Morgan Stanley Wealth Management has announced the launch of its Institute of Family Wealth Management (IFWM) to focus on family wealth which is part of a powerful strategy designed to help its Financial Advisors better serve clients’ growing multigenerational needs.

The IFWM is the first-of-its-kind interactive e-learning program that will give Financial Advisors the resources, process and knowledge to transform individual relationships into family relationships. The curriculum, which is entirely digital and accessible via tablet or PC, addresses the important planning needs of clients and their entire families, including spouses, children and aging parents, and the skills to engage these family members in the planning process.

“We are on the cusp of the largest wealth transfer in history, and we recognize the need for industry-leading family-focused solutions,” said Andy Saperstein, Head of Investment Products and Services. “The IFWM demonstrates our dedicated approach to building meaningful family relationships.”

The Firm’s most highly regarded wealth management experts, including Financial Advisors who already do this well, not only informed the content, but provide practical and tactical advice, via video messages and best practices, on how to apply the learnings in client engagements.

The Family Wealth Advisor designation, earned upon completion of the program, indicates a mastery of topics such as estate planning from the family perspective, families and philanthropy and family enterprises, as well as demonstrated ability to have effective conversations that help families understand and transition wealth from one generation to another.

“Innovative approaches such as the IFWM are part of our ongoing efforts to enhance the effectiveness of our Financial Advisors to the benefit of our clients,” said Jim Tracy, director of Morgan Stanley’s Consulting Group Wealth Advisory Solutions. “By building stronger relationships with clients and their entire families, we will lead the industry with our distinct family focus. Online advice is proliferating, but nothing can replace the value of personal advice from a highly trained professional who can ask the right questions.”

Morningstar Launches Family of More Than 60 New Global Equity Indexes

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Morningstar lanza 60 nuevos índices de renta variable
. Morningstar Launches Family of More Than 60 New Global Equity Indexes

Morningstar has launched more than 60 new global equity indexes. Now, Morningstar’s index family spans 45 countries in both developed and emerging markets. The new indexes provide investors with benchmarking tools that reflect the performance of equity markets worldwide and will serve as the foundation for the next generation of Morningstar “strategic beta” indexes.

“As more and more individual investors, advisors, and institutions take a global perspective to investing, our new index family will provide them with meaningful, consistent worldwide views across market capitalizations and regions to provide a deeper understanding of market behavior throughout the globe,” Sanjay Arya, head of Morningstar Indexes, said.

Morningstar’s new index family comprises global, regional, and country-specific indexes using a transparent, rules-based methodology with a focus on the investability of the underlying securities. The new index family can help investors with:

  • Market monitoring—Comprehensive and non-overlapping, the indexes allow investors to analyze performance trends and market movements around the globe.
  • Asset allocation—The global equity indexes reflect the risk and return profiles of each developed and emerging market country and can help investors build better model portfolios.
  • Attribution analysis—Investors can use the indexes to perform attribution analysis to understand what drives a manager’s or portfolio’s performance.

Currently, the indexes are available with end-of-day returns and constituent data in Morningstar Direct, the firm’s research platform for institutions. In the coming months, the company will add the indexes into Morningstar Advisor WorkstationS and Morningstar.com, investment platforms for advisors and individuals, respectively. Morningstar also plans to roll out real-time calculations early next year for the development of market monitoring tools and strategic beta indexes. Morningstar defines strategic beta indexes as those that seek to either improve performance or alter the level of risk relative to a standard benchmark.

Introduced in 2002, the Morningstar Indexes include a broad range of traditional beta equity, fixed income, and commodity indexes that are also combined to form asset allocation index series. In addition, Morningstar Indexes offers a family of strategic beta indexes that draw on the equity, fund, and asset allocation research across the company. Currently, Morningstar has more than 280 indexes and approximately 40 exchange-traded products track Morningstar Indexes globally.

ING IM Hires Convertible Bond Team from Avoca Capital

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ING IM contrata al equipo de bonos convertibles de Avoca
. ING IM Hires Convertible Bond Team from Avoca Capital

ING Investment Management has confirmed the hire off Tarek Saber and Jasper van Ingen from Avoca Convertible Bond Partners LLP to add convertible bond investment capabilities.

Having joined in November, Saber and Jasper respectively fulfill the roles of investment team manager Convertible Bonds and senior portfolio manager Convertible Bonds, based in London. The two previously managed the Avoca Convertible Select Global Fund, which launched in April 2012.

Tarek Saber has more than 27 years of experiences in convertible bond markets. He joined Avoca in 2011 where he led the convertible bond business. Prior to joining Avoca, Saber was at ABP/APG, where he set up and managed the successful corporate opportunity strategy fund (COS fund), which consisted of investments in convertible bonds and equity linked instruments. Before this, he spent seventeen years in investment banking as global head of convertible bonds at HSBC Investment Bank and as head of European convertible bonds and global head of global depository receipts trading at Schroder Securities.

Jasper Van Ingen has more than 10 years of experience in convertible bond markets. Between 2004 and 2010, he was senior portfolio manager at APG’s COS Fund. Van Ingen played an important role in the development of the COS Fund. He was responsible for the day to day management of the fund in all aspects, ranging from fundamental analysis to trading and corporate restructuring. Before joining the COS Fund, Van Ingen worked as a portfolio manager at APG’s $5 billion Hedge Fund investment department in Amsterdam and New York.

Defusing the Fiscal Timebomb

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Standard Life Investments warns that the public finances of developed countries are still vulnerable to an economic shock unless more is done to boost growth and reduce debt.

In the latest edition of Global Perspective, research by Standard Life Investments shows that sovereign debt in the developed economies of the OECD has ballooned since the financial crisis and that a renewed recession would push debt to even more worrying levels. Governments and central banks should act now to reduce their fiscal imbalances.

Countries can help improve their debt outlooks by pursuing growth friendly policies alongside prudent, long-term credible fiscal planning. The best policy response should include a combination of monetary stimulus, investment in infrastructure and deep structural reform. Without these measures, countries may resort to more painful and damaging economic policies to deal with high public debt burdens.

Jeremy Lawson, Chief Economist, Standard Life Investments, said: “The financial crisis has left a deep scar on public sector balance sheets across the developed world. Increases in debt, lower nominal growth rates and weakened budget positions have made governments vulnerable to another economic shock. What can be done to make public finances more robust and reduce debt positions?

“Our simple debt equation helps to provide some answers and shows that improving the nominal growth outlook provides the best policy option. Some economies, particularly those in the Eurozone, require further monetary stimulus alongside a temporary, targeted loosening of fiscal policy.

“More generally, countries should look to boost long-term growth rates by accelerating structural reforms aimed at boosting productivity. Public infrastructure investment is another avenue to promote growth, with the added attraction of being fiscally neutral if done effectively. Longer-term consolidation plans must also be enhanced.”

Wells Fargo Survey: Affluent Women ‘Enjoy’ Making Money

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A strong majority (93%) of affluent women “enjoy making and accumulating money” and more than half (53%) believe that money helps buy happiness, according to a new Wells Fargo survey of affluent women. Women have a strong sense of pride in earning money with 85% of them saying they feel proud about their earning power. Versta Research conducted the survey of 1,872 women, ages 40-79 with at least $250,000 in household investable assets, to examine their perspectives on wealth, investing, work and retirement.

Affluent women are taking the lead in managing the daily finances with 82% percent managing the household budget and purchase decisions, 79% managing the household cash flow and 75% paying the bills. But only 46% of these women are taking primary responsibility for choosing and managing investment accounts, and this rate falls to 34% among married women. Affluent women in their 40s buck this trend, with more than half (56%) choosing and managing investment accounts.

As their wealth has increased, 43% of affluent women say they have become more competent at handling investments, while 53% stayed the same and 4% became less competent. Along similar lines, a minority of these women (36%) say they have become more involved in financial decision making, while a majority (58%) say their involvement in financial decision making has stayed the same and 6% became less involved.

“I don’t think I’ve seen a study where women so overwhelming express joy at earning money and pride in their capacity to do so. And, they credit the stock market for increasing their wealth. However, we see fewer women managing their investments, although that is changing. The good news is more younger women in the workplace are taking on the role of investing for their households. If you are making money and you think the market is helping your money to grow, then it makes sense to be more directly involved in investment decisions,” said Karen Wimbish, director of Retail Retirement at Wells Fargo.

Wealth and the Stock Market

While a majority of affluent women (94%) feel they’ve worked hard to create their wealth, 68% acknowledge that most of their wealth has been generated by investments and growth in the stock market. More than three-quarters (78%) feel the stock market is the best way to grow savings over the long term. In fact, nearly two-thirds (64%) of affluent women say it’s more exciting to watch assets grow through good investments in the stock market versus watching it grow by earning and saving them (36%).

Given the stock market’s growth over the last five years, 37% of affluent women say they are “more eager to put money into the market right now,” while 23% are “more reluctant to put money in the stock market now” and 40% admit they “don’t pay much attention to the stock market.” Interestingly, almost three-quarters (73%) disagree that the stock market is too risky for them while 27% agree. But this is tempered with the more than half of women (54%) worried about losing money in the stock market.

The Role of Work

Work is an instrumental part of life for affluent women. In fact, three-quarters of affluent working women say having a job or career is important to them even if they don’t need the money. Two-thirds feel they are fairly compensated at work today. Yet, 59% of affluent working women don’t think women will achieve pay equality in the workplace in the next 10 years.

Sixty-two percent believe that women can “have it all” when it comes to balancing their career and family. However, only 38% say “having it all” is their goal (of whom 81% feel they are succeeding at it). Two-thirds (65%) of affluent women believe fathers should be more proactive about staying home to help raise children. Even if “having it all” is not the goal of many affluent working women, 58% say they are struggling with work-life balance. If given the opportunity for a big promotion at work that offered a significant step up from their current role and level of responsibilities, two-thirds (66%) of affluent women would accept it (of which 31% would be “excited, eager, and ready for it” and 35% would “accept it, but with reservations”) and 34% would decline it. Of those who would “accept it, but with reservations,” 53% worry about managing work-life balance, 30% worry about whether they are ready and have the skills to succeed, 16% are not sure if their current career path is what they really want and 23% cite other reasons.

Bequeathing the Financial Knowledge

While generally most affluent women would agree their parents did a good job teaching them about managing and saving money when they were growing up, more than two-thirds say no one ever taught them how to invest in the stock market. Nearly all affluent women (98%) say it’s important for women to feel confident about investing, but fewer (71%) actually do. One in five (21%) say one of their biggest financial regrets is not learning more about money and finance. While nearly one-third (30%) think that men are more interested in finances and investing, a majority (89%) don’t think men are better at it and half of affluent women think that men are overconfident when it comes to investing.

“It is interesting to see that affluent women credit their wealth to the stock market even though most say that no one taught them how to invest in the market,” said Wimbish. “These are successful women that should have the confidence and interest in making investment decisions for their future.”

Saving for Retirement

Affluent women are well-positioned for retirement. While the financial crisis did not affect the financial well-being for a majority of affluent women (57%), it did impact their savings behavior. More than half (54%) say it made them “more aggressive about saving money.” Only 48% of non-retired affluent women have an annual savings goal, and the median annual goal is $20,000. Non-retirees have saved a median of $600,000 and have a median goal of $1 million. They plan to retire at the average age of 64. While three out of four affluent women agree that they need at least $1 million to “feel wealthy,” 42% feel they would need $2 million or more.

“It’s crucial to have a savings goal so you know if you are on track. These women have the means and are disciplined savers, but having a financial plan with an investment strategy can put them on an even better path,” said Wimbish.

The affluent women surveyed exude confidence about having enough money. Four out of five (82%) non-retirees feel confident they will have enough money to live the kind of retirement they want. Nearly all (95%) of retired affluent women feel they will have enough money in retirement.

Seventy-two percent of non-retirees value their assets and wealth more for the lifestyle and security it will afford them in retirement versus the lifestyle and security it gives them right now (28%). The top three things that scare affluent women about retirement are: losing their health (55%), losing their mental abilities (52%) and running out of money (29%).

Defining a Successful Retirement

In defining a successful retirement, more than half of affluent women feel it is having enough money for their preferred lifestyle (55%), with other top choices including being healthy (23%) or spending time with family and friends (13%). When non-retirees think about their future in retirement, they look forward to spending more time with family (64%), focusing on physical fitness (63%) and becoming more charitable with their time (58%).

While it is hard to imagine what life will be in retirement, half of non-retirees (52%) anticipate their expectations and goals will change once they retire. Fifty-eight percent of retired affluent women say they did not have a realistic picture of what life in retirement would be like until they were in their 60s and beyond. And 43% of retired women say their retirement years are different from what they imagined.

“Life in retirement is hard to imagine until you are actually living in it. Having the fortitude to have a financial plan with realistic goals for saving and investing will allow you to recalibrate your retirement dreams when the time comes,” said Wimbish.