High expectations
The report also underscored Asian investors’ unusually high expectations for yield. In the second half of 2015, investors expect up to 26% yield across different asset classes, including local equities.
Loss tolerance for local equities was no more than 12% of invested capital. With offshore products, however, investors were unwilling to take a loss of more than 3-5% of invested capital.
“That such high expectations of yield are not accompanied by higher risk tolerance highlights a significant gap in investor knowledge,” the report said, adding that asset managers need to educate retail investors about basics such as yield versus risk.
Eastspring Investments’ survey was conducted from July to August 2015 and involved online interviews with 2400 investors in Hong Kong, Indonesia, Korea, Malaysia, Singapore and Taiwan.
Eastspring is the Asia asset management arm of UK-based Prudential.
