A survey by Taiwan’s Securities Investment Trust & Consulting Association provides a clearer picture of investment trends and of investors, including the fact that a majority of them lack understanding of mutual funds as a product category.
The survey of 1,200 individual investors also found that most of them would consider investing in mutual funds with an environmental, social and governance theme, and that exchange-traded funds are a promising area of growth.
Overall, 78% of investors had a savings account as part of a broader portfolio of investment products last year, 72% had equity exposure, and 33% had ETF exposure.
However, in spite of their exposure to investment products, 60% of respondents expressed lack of understanding of mutual funds.
The survey shows three key trends in the financial services industry: an ageing society, the rise of young investors, and the growing popularity of ESG investments.
Some 71% of respondents would consider investing in mutual funds that have an emphasis on ESG.
Older investors are more likely to favour fixed income, and have a more conservative approach to investing. Many older individuals are de-risking by investing in fixed income funds in order to save for retirement.
It’s the reverse for younger investors. The younger they are, the more ETFs and mutual funds they prefer.
Some 48% of investors aged 20 to 29 were not convinced they had attained an appropriate financial status for retirement. As a result, younger investors have a higher risk appetite than older investors.
Meanwhile, 46% of respondents cited trustworthiness and reliability of a firm as the most important criteria they consider when deciding to invest in a company, while 34% cited the size of a company as the key consideration.
*Donna Chen is with Taipei-based investment consulting firm Keystone Intelligence.