Asian high-net-worth individuals (HNWIs) have been eyeing to invest in overseas markets, looking out for differentiated products that offer greater stability and higher potential yields, according to a research note reported in the media.
Released by East & Partners, the research note was based on interviews of 1,000 HNWIs from 10 markets (excluding Japan) relating to their present and forecast asset allocation.
The report noted the overall proportion of assets allocated to equities by said individuals has been on an uptrend, from a total allocation of 42 percent of investible assets during the previous year to 44 percent presently.
Among the equities, these HNWIs prefer non-domestic ones over domestic ones, with allocation into this type of asset increasing from 18 percent to 22 percent over a period of less than 12 months.
“Equities are back in vogue, particularly if they are international equities outside of the Asian investors’ home market,” said the report.
Notably, non-domestic allocation has exceeded the forecasted allocation of 21 percent, and is even expected to increase further to 25 percent of total investable wealth, or up five percent from domestic equities allocation.
“The results show that allocation for domestic equities will decrease and plateau at around 20 percent in the coming year, while investment properties look likely to stabilise to take a 35 percent allocation,” added the report.
The growth in non-domestic allocation follows a reduction in property as well as fixed income allocations.
“Perhaps as the global economy continues to recover, Asian investors are starting to have concerns that a rise in base interest rates will be detrimental to their fixed-income portfolios.”
Driven by an unprecedented wealth creation and a bull run in stock markets, the investable wealth of Asian HNWIs outside of the family home has grown by 18 percent to a mean of US$4.98 million (S$6.18 million) over the previous year.
“The forecast suggests it will increase another 15 percent in the next 12 months to go above US$5 million (S$6.2 million),” said the report.
Muneerah Bee, Senior Journalist at PropertyGuru, edited this story. To contact her about this or other stories email muneerah@propertyguru.com.sg
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