Asian investors are moving away from major asset classes


Reacting to rising inflation and geopolitical tensions stemming from Russia’s invasion of Ukraine, Asian investors say they are buying more alternatives and stocks, according to research by Intelligence Bonhillwhich is part of the Bonhill group, owner of FSA.

“The most popular responses have shifted somewhat towards strategies less correlated to major asset classes,” according to the report.

Absolute return hedge funds took the top spot in terms of market sentiment, followed by Chinese and local equities.

Source: Bonhill Intelligence

Market sentiments for gold, private equity and real estate are also popular among investors.

Within the equity market, Japanese equities reversed popularity in the last quarter of 2021 to plunge this quarter, but remained marginally positive.

European equities, which were the most popular asset class last quarter, had a different story in the first three months of this year as new investor buying dried up.

While buy/sell intentions for US equities were still negative, the report saw the number of buyers increase from last quarter to around 25%, and believes there is still an opportunity for managers to funds.

The fixed income space “has remained stale,” as corporate and government bonds in the developed market continue to falter with few supporters.

The only two products in the fixed income segment that investors favor are unconstrained bonds and inflation-linked bonds.

Bonhill Intelligence identifies 250 leading fund selectors, portfolio builders and asset allocators in Hong Kong, Singapore, Thailand and Malaysia. Each of them is directly involved at a higher level in the decision-making process that results in the purchase of a third-party fund. They are asked if their intentions for a range of asset classes over the next 12 months.

Pan-regional differences

The report found that Singaporeans are more pessimistic than Hong Kong and Thai investors.

Hong Kong’s favorite global equity funds were only the third favorite stock category among Singaporeans and the least favorite stock in Thailand.

It also showed that while Hong Kong and Thai investors are still interested in European and Asian stocks, this is not the case in Singapore.

But there is one thing that investors in all three regions can agree on is that they continue to buy more alternatives, such as private equity, absolute return and index trackers.


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