Hong Kong investors seek long-term predictable returns
29 May 2013
News, Asia, Global, Hong Kong
By Asia Asset Management
More than double the proportion of Hong Kong investors feel more confident (39%) about investments this year than those who feel less confident (16%) according to The Schroders Global Investment Trends Report, which surveyed 501 Hong Kong investors among 14,800 active investors in 20 countries. Over eight-in-ten (84%) Hong Kong investors are looking to invest in equities, with the most popular being Chinese equities (45%) followed by Asia Pacific equities ex-Japan (30%), and BRIC markets equities (25%).
Lieven Debruyne, chief executive officer Hong Kong and head of intermediary Asia Pacific at Schroders, said: “What is clear is that investors are intending to return to the market in greater numbers this year and see opportunities for growth, notably in equities. We believe 2013 could be a watershed year in the journey back to a more robust global investment environment.”
However, there is fragility in investors’ confidence: Hong Kong investors are concerned about eurozone debt crisis (53%), a weak/prolonged economic recovery globally (45%) and increasing inflation (44%). When it comes to investment objectives, over three-quarters (77%) of investors in Hong Kong said they will be investing for long-term income generation, capital growth and capital protection over the next 12 months. The survey also reveals that close to 70% of respondents are looking to put investments into low- to medium-risk assets.
According to Mr. Debruyne, there is a clear divergence between investors’ investment desire and risk appetite and their expressed enthusiasm in equities.
“We can clearly see that the mindset of Hong Kong investors have become more conservative, but this has not been reflected in the investment decisions they intend to make. While investors are trying to construct a conservative portfolio, they may be inadvertently exposed to a very narrow range of assets that may expose them to increased risk,” he said.
The discrepancy between Hong Kong investors’ desired investment outcome and their approach might be attributed to how they obtain their investment information. According to the survey, 62% of Hong Kong investors rely on their own judgement, family and friends and news sources to make their investment decisions. Only 29% of respondents in Hong Kong said they would seek professional advice.
“Hong Kong investors should consider making better use of professional financial advisors to help them construct a portfolio that truly fits their investment goals. Advisors can help them look internationally for broader investment opportunities and products that can provide the yield and capital appreciation that they seek, while also diversifying their allocation of risk,” said Mr. Debruyne.
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