Schroders Global Investor Study 2021: Hong Kong investors demonstrate new interest in risky assets amid uncertainties
Despite concerns around market uncertainties, more than 70% of Hong Kong investors showed interest in high risk or newer assets including cryptocurrencies over the past 12 months, the Schroders Global Investor Study has found.
The risk-focused findings of Schroders’ flagship retail investment study, which surveyed over 23,000 people from 33 locations globally, including 500 of them from Hong Kong, found that many people are now investing in or intended to invest in assets they previously perceived as being too risky in the pursuit of returns.
Specifically, electric vehicle related stocks and funds, as well as biotech/pharma stocks or funds were highly popular among Hong Kong investors, where both types of assets were favoured by 81% of survey respondents, respectively. Close to three quarters (71%) also found newer assets such as cryptocurrencies interesting. These assets formed the top three types of investments that people have made for the first time over the past year, with 26% of surveyed respondents involved in each of these types of assets, respectively.
The result indicates that a significant proportion of Hong Kong investors feel compelled to take on greater risks to compensate for market uncertainties amid concerns such as the Covid pandemic, prolonged low interest rate environment, and rising inflation.
From a geographic perspective though, Hong Kong investors appear to be less aggressive than investors in the region. Overall, 49% of the surveyed Hong Kong respondents said they are likely to make higher-risk investments under low interest rate conditions. This compares to 59% in the wider Asia region as a whole.
Jason Yu, Head of Multi-Asset Management, Asia at Schroders, said:
“Our research indicates that many people in Hong Kong feel they now have to take on more risk in pursuit of returns. The challenging economic conditions that we have seen over the past year have likely played a part in this. Amid the low interest rate environment, riskier investment choices have unsurprisingly become more compelling.
“Hong Kong investors have also been spurred into looking at a broader range of asset classes. Overall, these findings demonstrate that the proportion of investors who are open to embracing greater risk has increased. However, we believe that taking a multi-asset, multi-theme investment approach can be a viable way for investors to achieve their investment objectives. Not only does it offer the benefit of diversification and some peace of mind on the stability of their overall investment returns, it can also capture long-term growth potentials from different asset classes, different geographies, plus megatrends that are influencing the world.”
Whilst investors in Hong Kong are willing to take on more risk, 64% of the survey respondents said the performance of their investments has an impact on their mental health. To better prepare themselves for the coming year, investors are encouraged to reassess their own risk appetite. Schroders’ investIQ is available to investors as a tool to help them learn about their investment personalities and the behaviors that may impact the way their investment decisions are made.
To find out more about Schroders Global Investor Study 2021, please click here.
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