Despite facing macroeconomic headwinds and uncertain market conditions, 97% of Singapore investors remain active in their investment activities in the past 12 months, according to a survey by Fullerton Fund Management.
The “Rethinking Investing: Investors’ attitudes and behaviours in an evolving landscape” study found investors citing a variety of reasons for staying active in the market. For one, 65% are proactively combating cost-of-living pressures. More than half are intent on deploying their surplus capital, while a similar proportion are seeking portfolio diversification.
Fullerton’s findings indicate that investors in Singapore demonstrate an openness and willingness to stay invested to create wealth and achieve financial security, says Fullerton head of multi-asset Pang Kin Weng.
“As capital markets evolve, investors need to ensure that their portfolio allocations are calibrated to meet their long-term investment objectives. Portfolios should be diversified to withstand market volatility as well as maximise long-term growth opportunities,” he adds.
Overall, most investors appeared willing to take low to moderate levels of risk, and nearly half the survey respondents cited an annual target return between 5% to 7% per annum from their investments. Their top investment goals were planning for retirement (70%), building wealth over time (67%) and creating regular income streams (60%).
According to the survey findings, three in four investors have maintained and even raised their risk levels over the past twelve months. The investors see the global environment turning incrementally positive, with many staying committed to their investment objectives.
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This positive disposition is more pronounced amongst younger investors, with 46% of investors aged 21 to 30 years old having generally increased risk in their portfolios.
When it comes to asset allocation, almost 80% of survey respondents prefer a mix of safe haven assets (savings account, fixed deposits, government bonds) as well as equities in the past 12 months. This could be attributed to investors wanting exposure to intrinsically stable and historically attractive cash yields, while waiting to deploy capital into attractive high risk value opportunities.
Taking a closer look by age group, Fullerton found that the investors surveyed had a penchant for assets in local currency. Fixed deposits, government bonds and Singapore equities are perceived as the three best assets to invest in right now, with the younger demographic more bullish on equities than their senior counterparts.
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The survey also highlights a discernible inclination among respondents over 40 towards Singapore stocks, demonstrating a “home bias”, whereas their younger counterparts aged 40 years and below exhibited a higher inclination towards global stocks.
This disparity may suggest a trend where younger investors lean towards growth-centric investment strategies, while older investors gravitate towards familiar markets that are perceived as more stable or valued for their dividend yields.
The results also highlight a rising inclination by investors to gain exposure to non-traditional assets and emerging structural themes. On the latter, 79% investors wanted exposure to sectors that align with the broader direction of the future global economy, in areas such as biomedicine, artificial intelligence and sustainable energy.
The survey of 500 Singaporeans was undertaken in late 2023. All surveyed were active investors, with at least 3 years of investing experience and investable assets of at least $40,000. Respondents were carefully selected to ensure a balanced and representative cross-section of Singapore investors across age, gender, marital status, ethnicity, income, and employment status.
