Hong Kong investors lead the Asia Pacific in moving cash into investments to generate retirement income, though they have become slightly less confident about achieving their expected incomes, according to a survey by New York-based asset manager BlackRock.
The survey asked 28,000 individuals in 18 markets – including 1,000 in Hong Kong – questions related to financial and investment management, and the likely impact on their retirement planning.
According to survey findings published on June 29, Hong Kong investors reduced cash holdings in their portfolios to 33% in 2017 from 46% two years ago, and put more money into equities and insurance-linked products to meet their financial goals. Meanwhile, their Asia Pacific peers had 46% of their portfolios in cash.
Almost three-quarters of Hong Kong investors indicate they are willing to invest as much as 40% of their cash, but are sitting on the sidelines due to concerns about market volatility and a lack of reassurance that their capital is secure.
The survey found that Hong Kong investors’ confidence in achieving targeted retirement income dropped to 41% this year from 44% in 2015.
Concerns about market volatility also worry Hong Kong millennials – those aged between 25 and 35 – with 58% indicating a lack of confidence when considering investing their cash, compared to 52% of their Asia Pacific peers.
This is despite having a higher risk appetite than their regional peers, as underscored by the fact that 68% own equities in their portfolios compared to 42% for other Asia Pacific millennials.
Damien Mooney, BlackRock’s head of retail business for Asia Pacific, said at a press conference that young investors tend to be more comfortable taking investment risks as they think they have more time to make up for losses.
He says it’s easier for them to invest in stocks because the entry point is lower compared to investments such as property.
Mr. Mooney says it’s important for investors to have exposure to assets such as equities and bonds to help grow wealth in the current low interest rate environment.
He says investors should plan for their retirement early and construct a more diversified portfolio with the advice of professional financial advisors.
