Singapore investors pivot to ‘risk on’ approach ahead of expected rate cut: survey

Majority invest for long-term capital accumulation while nearly a third invest for income.

Singapore investors are adopting a risk-on position ahead of the much-awaited rate cut by the US Federal Reserve, with 60% looking to raise their bet on equities, according to a survey by Fidelity International.

The report showed 53% of respondents in the city-state plan to raise their investments in fixed-income products while 38% intend to add to their fixed deposits.

The average investor in Singapore has 42% of their portfolio in cash and term deposits currently, but nearly half (47%) said they plan to reduce cash holdings and boost investments in other products.

Investors listed equities (69%), insurance-related products (67%) and fixed deposits (56%) as their top three asset classes currently.

In terms of investment priority, more than half are focused on long-term capital accumulation while nearly a third invest for regular income. 

37% invest with a five-year investment horizon in mind, 16% have three to five years while 4% have a fairly short timeframe of under six months. 

Investors in Singapore generally expect an annual return of 6.7% per annum, the lowest in Asia Pacific.

“It is positive to see that the majority of Singapore investors are actively considering investment opportunities outside of cash products, such as equities and bonds, in order to capture the next market cycle,” said Sabrina Gan, Head of Southeast Asia and Country Head of Singapore at Fidelity International.

The survey covered 6,515 respondents across six markets in the region, including 1,002 in Singapore.