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Celent, a Boston-based consultancy, says as the number of millionaires rises, their investment habits change. It expects that more wealthy people in Taiwan will shift their asset allocation to emphasise funds and securities over real estate.
For rich people, the firm notes in a recent study, equity stocks account for 24% of capital allocation, fixed-income products account for 15%, cash deposit accounts for 23%, real estate accounts for 16%, and other investments account for 32%.
ôGenerally speaking, the higher the income, the less retail traders invest in real estate, and the more they invest in bonds and securities and private funds,ö says the report.
The report says there are 6.5 million retail trading accounts in Taiwan, of which 10û15% belong to active traders. As the market matures, retail traders will increase, and active traders will become more common.
Active traders prefer the following products: equity stocks, options, futures, stock purchase warrants, Reits, ETFs, and other funds.
In terms of income, approximately 60% of retail traders are middle class, 23% earn less than $6,000 per year, and 17% earn over $35,000 per year.
As investment patterns change, more retail investors are also trading online û accounting for 19% of trading volumes. The five largest brokers are YuanTa Securities, Polaris Securities, Sino-Pac Securities, Central Trust of China, and Jih Sun Securities, which together have more than half the online market share.
Investors still favour private equity assets for their higher growth, better governance structures, and diversification potential.
The recent focus on greenwashing has put bond issues under greater scrutiny. However, some market participants believe this risks paralysis by analysis.
The AU$85 billion ($61.6 billion) Australian super fund has some exposure to indebted property developer Evergrande. Meanwhile, China’s construction finance is part of its core strategy in real estate.
Investors are seeing the risks, but also the opportunities of the logistics sector. Warehousing their fears for the moment, they can see it's a good conduit to high-growth assets.