Almost three-quarters (74%) of survey respondents from Asia said they will invest in equities this year – a slight 3% drop from last year – versus 70% of their global peers, according to Schroders’ Global Investment Trends Report 2014.
On average, 45% of investors in Asia believe equities in their home markets will outperform, versus the global average of 41%. Investors in Hong Kong, Taiwan and Singapore are the most optimistic on equities among their global peers, showing the highest confidence in local equities.
The findings emerged from a survey of 15,749 investors across 23 countries, including 5,395 investors in China, Hong Kong, India, Indonesia, Japan, Singapore, South Korea, Taiwan, and Thailand.
Investors with at least €10,000 to invest during the next 12 months were researched during 2 to 24 January on a series of 11 questions gauging their confidence and concerns regarding investment opportunities. It also asks investors to identify the regions and asset classes they expect to deliver growth and income in the coming 12 months.
Last month, Schroders' same research revealed domestic tax is one of the biggest concerns for investors in Europe. Click here to read more.
The study tracks the confidence and investment intentions of a range of investors from the middle class to the wealthiest in society.
The findings also revealed Asians are the most risk-tolerant and plan to put 25% of their investments in high risk assets, this is slightly higher than the global average of 20%.
Despite improvements in sentiment, Asian investors still say economic uncertainty on both global (24%) and local (22%) levels are their top concerns for this year, behind rising inflation (30%).
Grace Ho, head of marketing, Asia Pacific, Schroders said: “The gradual recovery of the global economy has spurred Asian investors’ confidence in equities, but their strong home-bias is exposing themselves to high levels of macroeconomic and fiscal policy risks.”
“We are already seeing adverse impact on emerging markets from quantitative easing tapering and we expect this to be one of the many challenges for Asian markets in 2014.”
Other key findings
- Investment confidence among Hong Kong investors has increased and a greater number of them are planning to return to equities in 2014, the highest in the world.
- Investors in Hong Kong, Taiwan and Singapore are the most optimistic, with 88%, 86% and 81% of them, respectively, planning to invest in stocks this year.
- Investors in Thailand plan to allocate 37% of their investments in high risk assets, followed by Indonesians (32%) and Hong Kong investors (28%).
- In terms of home country bias, 66% of Hong Kong investors believe equities in their home market will perform best, while 55% of Taiwan and Singapore investors, respectively, think their local stocks will deliver the best returns.
- Investors in India (90%), Thailand (83%), Indonesia (76%) and Japan (76%) have expressed the highest confidence in investment opportunities in the year ahead.
- Like a majority of investors in the world, nearly 40% of Asian investors said saving for retirement is their top investment goal, 36% said it is for emergency use. Unlike their global peers, 27% said their investment is for protecting against rising inflation.
- Gold and bonds are the second and third most popular investments among Asian investors in 2014, with 22% and 21% of survey respondents planning to invest in these asset classes, respectively.
