Fidelity International: Cash enthusiasm among Asia-Pacific investors gradually waning, stocks emerging as the preferred choice for the next market cycle
Investors in the Asia-Pacific region are gradually losing interest in cash and turning to stocks as the preferred choice for the next market cycle. A survey by Fidelity International shows that nearly half of Asia-Pacific investors allocate their assets to demand deposits and time deposits, but with the arrival of an interest rate cut cycle, investors' enthusiasm for cash is waning, and stocks are gradually taking its place. Furthermore, most investors feel financially secure, with the top three popular assets being stocks, time deposits, and insurance products. Investors mainly seek long-term capital accumulation, aiming for an annual return of around 8%
According to the latest report from Fidelity International on the "2024 Asia-Pacific Investor Survey," nearly half (48%) of investors in the Asia-Pacific region are allocating their assets to current and fixed deposits, as these cash assets have been providing interest rates higher than the levels of the past decade. However, with expectations of an interest rate cut cycle in the next 6-12 months, investors in the region are gradually reducing their enthusiasm for cash, with stocks replacing cash as the preferred choice for entering the next market cycle. Furthermore, an increasing number of investors (50%, up 5% from 2023) feel "secure" about their financial situation, especially in Australia (68%), Hong Kong (65%), and mainland China (64%).
As for the top three most popular assets, stocks are in the lead, with 67% of investors in the region holding stocks (especially in Hong Kong, Taiwan, and Singapore), 63% of investors owning fixed deposits (especially in mainland China, Hong Kong, and Japan markets), and 58% of investors holding insurance products (especially in Hong Kong, Taiwan, and Singapore markets). Investors in mainland China and Japan tend to have a more conservative investment stance, focusing on fixed deposits as their main asset, while investors in Hong Kong and Singapore prefer diversified investment portfolios and tend to increase their allocation to stocks.
Regarding investment objectives, over half (58%) of Asia-Pacific investors prioritize long-term capital accumulation, while over a quarter (27%) focus on regular income. In terms of investment horizon, 37% of Asia-Pacific investors aim for an investment period of 5 years or more, 17% target 3-5 years, and only 5% aim for less than 6 months. Regardless of investment objectives or duration, there is a general expectation of an annual return of 8%, with investors in Taiwan and Australia having higher expectations, with expected returns of 9.5% and 8.8% respectively.
Stanley Sim, Director of Investment Strategy at Fidelity International, commented: "We are pleased to see that the majority of Asia-Pacific investors are focusing on long-term investments. A longer investment horizon allows investors to have a broader view of investment prospects without being affected by short-term market fluctuations. Especially for young investors who are able to make long-term investments, it is important to start managing their personal investment portfolios early. However, the survey found that only one-fifth of investors aged 18 to 29 have an investment horizon of 5 years or more. Consistent investment throughout the market cycle is key to achieving long-term capital growth."