US investor optimism up 14%, according to UBS survey

Swiss financial firm UBS’s (NYSE: UBS) UBS Wealth Management Americas (WMA) unit said it has launched its Investor Watch report, a new quarterly survey of US private clients’ investment decisions and primary concerns as the nation approaches the November 6 election.

According to UBS, the first Investor Watch shows individual investors’ optimism returning, their flight to cash receding and their intentions to reinvest in financial markets and spend on experiences.

The survey shows that individual investors are more optimistic than a year ago:35% are optimistic about the short-term (12-month) economic outlook, versus 21% a year ago. And while 38% are pessimistic about the economy, that number is dramatically lower than a year ago, when 60% felt this way.

Younger private clients aged 25-49 are more optimistic about the short-term outlook and are more willing to take risks; 45% of younger investors are optimistic about the short-term economic outlook, compared to only one-third of older investors.

The vast majority of investors feel they have the right amount of cash. High net worth investors, especially, plan to decrease cash holdings and reinvest in the markets over thenext year.

According to the findings, 61% % of US private clients are highly concerned about the size of the national debt in terms of potential impact on their financial goals and objectives. Rising health care costs and the national election were close behind on the list of investors’ worries.

Investors are spending more time and money on leisure and experiential activities and less on shopping.

The UBS Investor Watch survey was conducted among more than 2,000 US investors, including current UBS clients, UBS said.

Swiss banks expect exodus as foreign tax authorities demand increased transparency

Swiss banks are expected to lose billions of francs in deposits and assets as cash-strapped European governments, struggling to balance their budgets, are applying pressure on Switzerland to introduce tighter rules to prevent foreigners from using secret accounts to avoid their local taxman.

In an interview with Schweizer Bank magazine, head of UBS wealth management Juerg Zeltner, said that hundreds of billions of francs would flow out of Swiss banks in the coming years.

Zeltner’s remarks are mirrored by German financial consultancy firm Zeb Rolfes Schierenbeck, which is forecasting that wealthy Europeans will withdraw as much as CHF200bn of funds and assets from Swiss banks by 2016.

The Swiss government has reached deals with Germany, UK and Austria to increase transparency and 11 Swiss banks are being investigated by US tax authorities.

Recently, a former UBS banker was paid $104m by the US Internal Revenue Service (IRS) for revealing systematic efforts by the bank to help rich Americans evade taxes in their home country, which resulted in UBS being fined $780m in the US.