Schroders Global Investor Study 2021: Hong Kong investors expecting an all-time high return of 11.4% p.a.
Hong Kong investors are becoming more aggressive as their expectation on investment returns has reached a new high of 11.4% p.a., whilst the Covid-19 pandemic has prompted them to focus more on their savings and financial well-being, Schroders Global Investor Study 2021 has found.
The flagship study, which surveyed over 23,000 people from 32 locations globally, including 500 of them from Hong Kong, found that more than three quarters (76%) of people in Hong Kong spent more time thinking about their financial well-being and reorganising their personal finances since the outbreak of Covid-19.
Owing to significant levels of concern on both current and future financial well-being, Hong Kong investors have placed more emphasis on their savings, with 80% of them having saved as much as they planned to or saved more than they intended to.
On average, Hong Kong investors have also raised their return expectations, now expecting a return of 11.4% p.a. over the next five years, compared to 10.3% p.a. a year ago.
With return expectations higher than ever before, investors have become more attentive to new investment opportunities that are reshaping the world. Over the past year, the top three sectors where investors have put their money in were stocks and funds invested in internet and tech companies (60%), electric vehicle and related industries (47%), and biotech and associated pharmaceuticals (45%).
By geography, a near majority of Hong Kong investors (86%) take preference on Asia, followed by Europe (67%) and North America (58%).
Levels of investment knowledge also seemingly improved amongst Hong Kong investors, with 50% of them described themselves as having an ‘intermediate’ level of investment knowledge, compared to 43% a year ago. A third of investors (34%) also purported themselves as ‘expert/advanced’ investors, a slight increase from 31% a year ago.
This may be due to Hong Kong investors becoming more keen to seek guidance from financial professionals, with 47% of them said they usually go to banks for financial advice, an increase from the 41% who said so last year.
Amy Cho, Chief Executive Officer, Hong Kong and Head of Distribution, Asia Pacific, Schroders commented:
“It’s pleasing to see that investors in Hong Kong have become more attentive to their investments and taking a longer-term view on their finances. The unprecedented pandemic may have been a wakeup call to adjust their financial habits, and better equip themselves for the uncertainties and opportunities that lie ahead.”
“With the emergence of certain structural trends that are changing our way of life such as the growing popularity of online shopping and the transition to a low-carbon future, there are indeed opportunities in specific sectors. However, rather than trying to focus on a sector or two, we believe focusing on structural themes and invest across the value chain would point to a broader opportunity set. Cyclical factors could come into play, so taking a multi-thematic approach is expected to add value.”
“Whilst it could well be due to home-bias that Hong Kong investors are keen on Asia as an investment destination, we continue to be convinced of the prospects of the region. Asia has leveraged on disruptions brought by the pandemic to accelerate the development of digital innovations critical to the post-pandemic era. These include remote communications, digital healthcare, mobile payments, e-commerce, and next-generation mobility. Related developments in the world’s two most populous nations - China and India - capture the dynamic of why we believe Asia will shape the 21st century. We do remind investors to consider diversification across equities and fixed income to help manage short-term volatility, and at the same time, to enjoy the benefit of income flow, and in turn, helps smoothen out the return pattern.”
To find out more about Schroders Global Investor Study 2021, please click here.
*In March 2021, Schroders commissioned an independent online survey of over 23,000 people who invest from 32 locations around the globe. This spanned countries across Europe, Asia, the Americas and more. This research defines people as those who will be investing at least €10,000 (or the equivalent) in the next 12 months and who have made changes to their investments within the last 10 years. Due to this threshold, Schroders acknowledges that this group and therefore the research findings are not representative of everyone’s experience of the pandemic.
The views and opinions contained herein are those of Schroders’ investment teams and/or Economics Group, and do not necessarily represent Schroder Investment Management North America Inc.’s house views. These views are subject to change. This information is intended to be for information purposes only and it is not intended as promotional material in any respect.