Schroders report: Majority of global investors hindered by 'ambiguity aversion'

Investors have a bias towards 'safer' investments

A majority of investors globally suffer from "ambiguity aversion", or a bias towards perceived safer and more predictable investments at the risk of achieving lower returns, according to Schroders' latest investIQ test.

The test, which was completed by more than 45,000 people across 16 countries, found 'ambiguity', 'loss' and 'optimism' were the biggest behavioural biases investors fell victim to, with respective scores of 59.48, 57.27 and 55.29. At the opposite end of the spectrum, 'impulsivity', 'herd mentality' and 'regret' received the lowest scores of 43.11, 43.55 and 43.56 respectively. In terms of gender, the investIQ test found male investors are more likely to be overconfident when constructing their portfolios, which means they can overestimate their ability to make rational investment decisio...