Schroders Global Investor Study 2022: Hong Kong investors keen to exercise shareholder power over issues that matter
Hong Kong investors believe that they should have the power to influence decision-making at the corporations they are invested in, while investment knowledge plays a crucial role in empowering them to align their fund investments with their principles and needs, the Schroders Global Investor Study 2022 has found.
Schroders’ flagship study surveyed over 23,000 people who invest from 33 locations globally, of which 500 are from Hong Kong. Human capital management, natural capital and biodiversity, as well as climate are seen as the most important issues to engage with companies on by Hong Kong investors, with a vast majority (91%) holding the view that they as shareholders should have the power to influence corporate decision-making on such issues.
Amy Cho, Chief Executive Officer, Hong Kong and Head of Distribution, Asia Pacific, commented:
“Investors are increasingly keen to express their views as they seek to better align their principles with their financial needs. At Schroders, as investors and guardians of our clients’ assets, we seek to actively influence corporate behaviour to ensure the companies we invest in are managed in a sustainable way.”
“In following our active ownership model, we are committed to engaging in year-round dialogues with the companies that we invest in, and have recorded and monitored our ESG engagements for over two decades. In 2021, we conducted 2,100 sustainability-focused engagements and voted on around 80,000 shareholder resolutions in more than 7,000 meetings globally.”
Knowledge is power
A gap remains in terms of how ascertained Hong Kong investors overall feel they are making the right investment decisions for their future. 76% of “expert/advanced” investors feel they have sufficient knowledge to feel confident in making investment decisions for their financial future, while only 12% of “beginner/rudimentary” investors feel knowledgeable enough to do so.
This highlights the need for continuous financial education and the role financial providers have to play. Almost two-thirds (65%) of Hong Kong respondents believe that investment companies should be responsible for ensuring that people have sufficient levels of knowledge on personal financial matters, and around half (51%) think it should be the responsibility of financial advisers.
Significantly, 40% say educational institutions have a role to play in educating people about financial matters, while a quarter (25%) view this as their personal responsibility.
The power to explore new investment horizons
Investors are becoming increasingly proactive in managing their investments amid rising inflation and higher return expectations. Of those surveyed in Hong Kong, 89% have made or intend to make changes to their portfolios. They are also seeking an average annual return of 11.50%, which has increased since 2021, over the next five years.
The study shows that Hong Kong investors are expressing interest in a diverse range of private asset classes, with 64% wanting to invest in private equity, followed by digital assets (59%), real estate (53%) and infrastructure finance (53%).
Amy Cho commented:
“With inflation and potentially recession on the cards, investors are more proactively pursuing returns they wish to make. In supporting investors’ growing interest for a holistic portfolio approach that encompasses both private and public investments, we see the trend of ‘democratisation’ through blending public and private assets.”
Important Information
The contents of this document may not be reproduced or distributed in any manner without prior permission.
This document is intended to be for information purposes only and it is not intended as promotional material in any respect nor is it to be construed as any solicitation and offering to buy or sell any investment products. The views and opinions contained herein are those of the author(s), and do not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. The material is not intended to provide, and should not be relied on for investment advice or recommendation. Any security(ies) mentioned above is for illustrative purpose only, not a recommendation to invest or divest. Opinions stated are valid as of the date of this document and are subject to change without notice. Information herein and information from third party are believed to be reliable, but Schroder Investment Management (Hong Kong) Limited does not warrant its completeness or accuracy.
Investment involves risks. Past performance and any forecasts are not necessarily a guide to future or likely performance. You should remember that the value of investments can go down as well as up and is not guaranteed. You may not get back the full amount invested. Derivatives carry a high degree of risk. Exchange rate changes may cause the value of the overseas investments to rise or fall. If investment returns are not denominated in HKD/USD, US/HK dollar-based investors are exposed to exchange rate fluctuations. Please refer to the relevant offering document including the risk factors for further details.
This material has not been reviewed by the SFC. Issued by Schroder Investment Management (Hong Kong) Limited.