This is the third year running that Eastspring Investments has conducted the Asia Investor Behaviour Survey. We surveyed 2,400 investors across 6 markets. The survey has highlighted important findings about what is most important to investors in individual markets across Asia, and provide valuable insights to their investment behavior.
In many local markets, there is still a significant bias to domestic products. Local investors consider home market equities as likely to generate a higher yield than their counterparts, and often two to three times higher than other asset classes. Asian investors are generally taking a bearish approach towards the economy, with many intenders showing a growing appetite for Income and Growth & Income strategies. Retail investors across Asia demonstrate a significant lack of understanding about the opportunities and risks across various asset classes. That such high expectations of yield are not accompanied by higher risk tolerance highlights a significant gap in investor knowledge.
Key themes from the survey
Strong domestic bias in volatile market conditions
In many local markets, there is still a significant bias to domestic products. Although for the majority of regional respondents allocation is expected to stay in home markets for the second half of the year. The portion of Malaysian investors’ portfolios allocated to local equities is expected to fall from 70% to 59% before the end of the year as investors look to diversify with offshore strategies.
Growing appetite for Income and Growth & Income funds
Income and Growth & Income funds continue to be popular with investors in 2H’15, with the exception of Korean and Taiwanese investors who exhibit a slight preference towards Growth funds. Overall, the market index across these six markets is “Income oriented” with fund intenders in particular showing a stronger preference for Income or Growth & Income funds.
Investors generally expect a higher yield from local equities than other asset classes. In particular, Hong Kong investors expect up to 26% yield in 2H’15. Retail investors have the highest expectation of yield from local equities, Asia (ex-Japan) equities and Chinese equities. Investors exhibit strong risk aversion to offshore equities and bonds, and almost 50% of investors are not willing to take a loss of more than 3-5% of their invested capital for these asset classes. That such high expectations of yield are not accompanied by higher risk tolerance highlights a significant gap in investor knowledge.