Nearly 60 percent of Taiwanese failed to achieve their investment objectives in the past five years, worse than their peers in Asia and globally, international asset management firm Schroders PLC said yesterday.
While Taiwanese used to be active investors in times of market volatility, they have turned conservative since the end of last year, unsettled by the US-China trade dispute, the survey found.
In the past five years, 59 percent of Taiwanese failed to realize their investment goals, more than 56 percent in the region and 51 percent globally, according to the survey that polled 25,743 investors from 32 countries in April and May.
The UK-based firm limits its annual survey to people with investments of at least NT$350,000.
To explain the disappointing returns, 20 percent blamed a weaker-than-expected showing on their investment tools, 18 percent cited unrealistic return expectations and 17 percent said that more time was needed.
Taiwanese seek a 10.7 percent return on average, on par with their global counterparts, but behind the 11.5 percent target among Asian investors, the survey showed.
Still, return expectations are much higher than those provided by the MSCI Global Index, which has generated 6.25 percent returns annually for the past five years on average, it said.
Schroder Investment Management Taiwan said that 31 percent of local investors had previously opted to raise stock positions, the second-highest in terms of risk tolerance.
However, the US-China trade dispute has changed their behavior, as 36 percent plan to stay on the sidelines until uncertainty clears, the local fund house said.
Only 17 percent said that they would increase holdings, lower than global investors at 30 percent and Asian peers at 27 percent, it said.
“That is probably because Taiwan has heavy exposure to both the US and China, the world’s two largest end markets for consumer electronic products,” Schroders Taiwan said.
The nation is home to the world’s top contract makers of electronics used in smartphones and laptops, rendering corporate earnings vulnerable to high tariffs.
Market volatility is inevitable and patience is the best way to emerge profitable, Schroders chief investment solution officer Charles Prideaux said.
“Frequent changes of investment tools to pursue yields have time and again proved disappointing,” Prideaux said.
Taiwanese spent an average of 2.6 years on their investments, similar to global peers and Asian counterparts at 2.6 years and 2.5 years respectively, the survey found.
However, 40 percent of local investors pulled out in less than a year, it added.
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