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Asia's wealth managers optimistic about region

Publication Date : 24-04-2012

 

Leading fund managers from the region are optimistic about the months ahead but say the changing regulatory environment looms as their biggest challenge, according to a new survey.

As well as new rules being touted for the financial sector in many nations, firms also found hiring and retaining talent remains another challenge this year although it was a bigger headache last year.

About 40 per cent of respondents last year in an annual poll by financial services provider Barclays cited staffing as their main issue, but that had fallen to only 24 per cent this year.

The survey pooled the views of 109 wealth managers from 65 firms with a total of about $3 trillion in assets under management. Investment experts in banks, private banks, broker dealers, fund managers and insurance companies across eight Asian countries were polled.

Despite their generally optimistic outlook, 59 per cent said capital protection ruled their investment strategy.

"Evidently risk aversion is still top of mind for investors, as demonstrated by the great importance they place on protecting their underlying capital," said Peter Hu, Barclays' head of investor solutions for retail. He added that demand for simple, transparent products reflects an ongoing measure of risk aversion.

Growth has emerged as the most important feature this year in driving investment decisions, taking over from liquidity, which was No. 1 last year.

The survey also found China remains a source of optimism. A remarkable 96 per cent expect the world's second-largest economy to avoid a hard landing this year while 68 per cent expect moderate growth of 6 per cent to 8 per cent.

About 54 per cent expect the growth of assets under management in China to remain above 15 per cent and Indonesia has overtaken India as the country with the second-highest growth expectations.

About 36 per cent expect assets under management will expand by 15 per cent or more a year. They also expect the number of millionaires in Asia to grow this year.

The ultra-high net worth segment, which made up 19 per cent of assets under management last year, should grow their share to 24 per cent this year.

Most also dismiss the possibility of the European Union breaking up over the next two years.

Most wealth managers recommended increasing the weighting towards US equities over the next six months, signalling a more positive outlook on that economy.

Equities continue to be the most actively used asset class this year but gold is seen as the best hedge against inflation; last year, equities were favoured.

 

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