Why investors are shifting capital to US tech stocks

Seven in 10 investors allocate 75% of their equity to the US market.

Singaporean investors are directing a growing amount of capital towards foreign markets, with the United States being a top destination.

Data from Moomoo Financial Singapore revealed that their profitable clients allocated 75% of their equity portfolio to the US market and only 20% to Singapore stocks.

Gavin Chia, CEO of Moomoo Singapore, said investors are channelling their funds into US tech names to boost returns by tapping into major growth markets and sectors.

Chia underscored that companies based in the US saw exponential growth during the first half of the year.

"At the same time, they are also taking advantage of the higher-for-longer interest rate environment by putting their money in money market funds, given their relative safety and attractive returns," Chia added.

Another overseas market to consider is Japan, according to Hiroki Kawai, senior executive officer at Japan Exchange Group.

Kawai urged investors to engage in Japan's stock market, stating that now is an opportune moment for retail investors to participate.

"Our corporate transformation initiatives and increased shareholder returns are catalysts for growth," Kawai said.

He highlighted the strategic restructuring of market segments and the government's push for asset-based income growth as pivotal elements driving this momentum.

Within Singapore, Chia said investors are allocating their capital towards real estate investment trusts (REITs) and exchange-traded funds (ETFs).

"Interest rates have somewhat peaked, and there is a revived interest in REITs. For example, the latest Fraser Centerpoint Trust placement was 2.5 times oversubscribed, signalling strong investor confidence. This surge in demand indicates a renewed confidence in the stability and income-generating potential of REITs,” said Lily Chia, head of Regional Equities & FICC Sales, SGX Group. 

Meanwhile, ETFs provide a haven of stability and growth amid geopolitical and economic uncertainty, said the SGX official.

ETFs are a common vehicle for passive investing, a trend growing amongst Singaporean investors.

The move towards passive investing is unmistakable," the SGX official said.

Among investment vehicles, Moomoo Singapore's Chia said equities remain the most popular choice for Singaporean investors. 

Wealth management products also saw significant allocations.