Most affluent investors in Taiwan have struggled to find investment gains meeting their expectations, a survey released yesterday said.
The annual survey conducted by Legg Mason Investments (Taiwan) Ltd is in its third year. It polled 200 affluent investors in Taiwan with investable assets averaging US$1.6 million.
The survey showed that Taiwanese investors are seeking to achieve the highest average annual rate of return among global investors at 10.6 percent. However, their actual average rate of return was only 7.3 percent, resulting in an expectation gap of 3.3 percent, notably higher than the global average of 2.4 percent, Legg Mason said.
“This disparity between desired and actual returns could be attributed to an entrenched attitude of conservatism towards investments,” Rick Chen (陳宏達), local head of the US-based asset management company, told a media briefing in Taipei.
The survey showed that 72 percent of polled investors in Taiwan claim to be conservative when investing, compared with a much lower global average of 59 percent.
A total of 81 percent of Taiwanese investors are also more risk averse from a year ago, the survey’s data showed.
The conservative attitude among Taiwanese investors is also reflected in their cash holdings, which account for an average of 31 percent of their current asset allocation, Chen added.
However, Taiwanese investors continue to have enthusiasm for international investment, with almost nine in 10 investors holding foreign income-producing investments, the second-highest level in the world, after Hong Kong’s 92 percent.
Diversifying risk across different markets and a greater potential for higher returns are the two major factors cited for investing internationally, the survey said.
Chen said the top three markets with the strongest appeal for Taiwanese investors are China, the US and Japan, but the US is the only one with solid fundamentals, with the rise in other markets generally backed by their governments’ quantitative-easing strategies.
In addition, 86 percent of investors in Taiwan think that the local property market is overvalued, but 43 percent still believe that real estate offers the best investment opportunities over the next 12 months, according to the survey.
Globally, investors are bullish on equities, with more than half of polled investors around the world scheduled to increase the share of equities in their portfolio over the next year, compared with 37 percent of investors recorded in last year’s survey.
Eight in 10 investors globally are also positive about their investments in the coming year compared with a year ago, Legg Mason said.
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