Ultra-rich investors in Asia-Pacific are moving away from a wait and see approach as concerns over market volatility set in, according to a survey.
A survey of 450 wealthy investors in the Asia-Pacific revealed their top concerns.
They included how to manage current market volatility and how to betterdiversify their portfolio to mitigate these risks.
Since the survey in 2020, the need for these strategies has increased.
According to Jean-Francois Aboulker, the Head of Ultra High Net Worth Individuals Offering Asia, a majority of the HNWIs surveyed did not change their portfolio characteristics.
There was a lack of understanding of the risks involved in the Pandemic.
More than 70% of the investors in Singapore, Hong Kong, Japan, Thailand, the Philippines, Indonesia, Taiwan and Australia have realigned or changed their portfolios to better weather market conditions.
Even if the impact of Covid-19 is global, there are significant divergence in equity returns in different countries, and certain asset classes are underrepresented in some markets.
The prospect of a recession was the most troubling, according to a survey. The people of Singapore were the most worried about it.
The report said that Japan, where inflation had been close to zero for more than three decades, is now facing inflation pressures.
A third of Japan HNWIs think that the Bank of Japan will tighten its monetary policy in the next year.
Wealthy investors in the region don't worry about rising interest rates because they think most governments won't increase rates to damage the economy, according to a survey.
Australian and Indonesian investors don't know. Around 70% of those surveyed say higher interest rates are a concern.
In the next 12 months, investors in the Philippines are the most concerned about geopolitical instability, followed by those in Hong Kong and Singapore, according to a survey.
Many investors are concerned about the impact of conflicts on the returns of their investments. They are worried about missing out on opportunities during this time of uncertainty.
The current environment of falling stock prices, widening credit spreads and high long-term rates has negatively impacted their portfolios.
Two things have happened to mitigate the risks.
The survey found that ultra-rich investors in Asia Pacific have turned more conservative, and are more likely to invest in their own companies.
Money has been put into safe assets such as gold. Private assets include private equity, private debt, real estate and infrastructure investments and are being invested by investors in Singapore and Australia.
Many investors have left the domestic market in the past two years. A more global mix in their portfolios has been the result of the post- Covid uncertainty and Japanese and Indonesian investors are doing this.
There are significant divergences in equity returns in different countries even if the impact of Covid-19 is global.
The investors understand the importance of a long-term approach in looking out for assets beyond their domestic markets.
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