Singapore investors are unfazed by market volatility: poll

Half of them think the best investment opportunities in 2019 are in Singapore.

Almost half or 47% of Singapore investors are willing to invest in the face of increased market volatility despite raising concerns with inflation, world economic instability, health insurance costs and trade wars between markets, according to Legg Mason Global Asset Management’s annual Global Investment Survey.

With regards to where such opportunities can be found, almost half were optimistic about investments at home as 49% of them think the best investment opportunities are in Singapore in the next 12 months. Meanwhile, 44% believe opportunities are in China whilst 37% are eyeing US investment opportunities, according to the report.

“Investors are most confident about their international stocks (42%) and domestic stocks (30%) as the best investment opportunities over the next 12 months, followed by real estate, alternatives, cash, gold and precious metals and cryptocurrencies,” the research stated.

According to the study, Singapore’s average investment portfolio consists of cash or cash equivalents (35%), equities (25%), fixed income (17%), real estate property/funds (11%), alternatives (9%) and gold/precious metals (4%), with a 50-50 split between active and passive investments.

More than a third of Singaporean investors surveyed said they used a financial advisor for all or the majority of decisions, whilst 17% are ‘DIY investors’ who did not seek help from them. Amongst those who worked with an advisor, nearly two-thirds said advisor trust is generated by transparency in fees/ information, strong investment performance and a good reputation.

Meanwhile, after being shown a description of environmental, social & governance (ESG) investing, 32% of investors strongly agreed that fund managers should be actively involved in policing companies they invest in to ensure they act responsibly.

“Over a third (36%) said they chose funds to invest in according to ESG considerations; governance factors were most important (30%) followed by environmental (24%) and social (15%) factors,” the firm noted. “However, 30% said all three were equally important.”

Taking a one-size-fits-all approach to investing is no longer an option, the firm stated, with investors now rebalancing their portfolios in a bid to reduce cash and fixed income exposure, embrace equities and alternatives and seek higher yielding returns and income amidst the fluctuating market.

“Today’s investor is self-confident, conviction-led and increasingly ethical,” the report highlighted. “Corporate social responsibility and sustainability are influencing investment decisions as much as they are impacting shopping patterns and consumption choices.”

The 2018 survey was completed by 16,810 investors in 17 markets across Europe, Asia Pacific, Latin American and the US, with respondents planning to invest at least US$50,000 in the next 12 months and who have made changes to their investments within the last five years. 5000 of the respondents were from Hong Kong, Singapore, Japan, Taiwan and China.