When it comes to the portfolios of Asia’s high net worth individuals (HNWI), property has been featured prominently. However, a new survey conducted by East & Partners Asia shows that many Asian HNWIs are not focusing as much on property these days and are also removing local stocks from their portfolio and replacing them with foreign ones.
Of the people surveyed, property only makes up 32.2 percent of Asian HNWIs’ portfolios. The survey interviewed HNWIs from China, Taiwan, Hong Kong, Singapore, Indonesia, Malaysia, the Philippines, India, Thailand and South Korea who are engaged in some form of wealth creation.
In 2014, an HSBC report found that property took up nearly 40 percent of Asian investors’ portfolios. This demand for property was highlighted by the fact that outbound real estate investment from Chinese HNWIs totaled more than USD10 billion in the same year.
HNWIs are still buying property with China leading the way, but investment diversification is now taking place. The survey pointed out that a rise in alternative assets could be the reason behind the decrease in property investments.
“East sees this shift continuing over the medium term, with investors forecast to further increase their holdings to 15.8 percent in the coming year,” East & Partners Asia said in a report.
In addition to deemphasizing property, Asian HNWIs targeted more international investments. Many investors lowered their allocations for domestic equities and shifted those funds to international equities. Another interesting trend the survey spotted was the fact that HNWIs are now more likely to seek advice from private bankers and financial advisors when it comes to wealth management.
It’s estimated that nearly 70 percent of Asian HNWIs managed their own wealth to some extent in 2014 but that total is now somewhere closer to 50 percent. According to the survey, the percentage of Asian HNWIs using a private banker has also risen significantly during the past few years.
