SOUTH-EAST Asian investors have gained an increased focus on their financial well-being, more so than their global counterparts, and this behaviour is likely to be a lasting legacy of the Covid-19 pandemic, according to the Schroders Global Investor Study 2021 on Tuesday.
The study found that a vast majority of investors have spent more time considering their financial well-being and reorganising their personal finances since the pandemic began, the asset manager said.
This is particularly so for investors in Thailand, with 91 per cent of them sharing this view strongly. This was followed by investors in Indonesia at 88 per cent, Malaysia at 85 per cent and Singapore at 81 per cent.
More than half the investors in this region are likely to save more once the Covid-19 situation normalises, compared with the global average of 46 per cent.
The study surveyed 24,000 individuals in 33 economies across Asia, Europe and the Americas from March to August this year.
Schroders noted that the survey reflected respondents' relatively more cautious outlook stemming from fluctuating lockdown cycles and slow vaccine rollouts during this period.
Respondents' more measured approach also applied to their retirement outlook, with 65 per cent of retirees in South-east Asia now more conservative with spending their retirement savings, compared with 58 per cent of retirees globally.
Meanwhile, 75 per cent of those yet to retire now want to save more towards their retirement, higher than the global average of 67 per cent.
Over the course of 2020, 26 per cent of investors in South-east Asia said they had saved more than they planned to, while 56 per cent saved as much as they had planned.
Among those who were unable to save as much as planned, 57 per cent in South-east Asia cited reduced income as a key reason.
Despite the challenges posed by the pandemic, investor confidence is at its highest level since Schroders began this study in 2016. They are expecting annual returns to average 11.3 per cent, up from last year's prediction of 10.9 per cent.
Overall, South-east Asian investors are among the most bullish, as they expect annual total returns of 12.8 per cent over the next five years. This is followed by investors in the Americas, broader Asia and Europe.
"Despite the huge challenges we have all encountered, it is encouraging to see that the pandemic has acted as a catalyst for promoting a stronger focus on generic financial planning and wellbeing," said Stuart Podmore, a behavioural investment insights specialist at Schroders, noting that the pandemic has heightened the overall sense of uncertainty.
"At the same time, we need to exert caution over the investment returns we expect over the coming five years, as the outlook shared by many investors - and in particular those who believe themselves to be experts - is exceptionally optimistic," he said.
He added that the future remains difficult to predict, as evidenced by the past 18 months, and a consistent and patient approach to investing, focused on long-term objectives and probable outcomes, is likely to stand investors in better stead.
Source: The Business Times (Singapore)
Date: 14 September 2021
September 21, 2021