Chinese investors are the most aggressive in their investment risk tolerance and the most confident in their investment abilities, compared to counterparts in the rest of the world, according to a Global Investor Survey by Legg Mason Global Asset Management.
Within the group surveyed, younger Chinese investors lead in terms of risk tolerance and self-confidence in managing personal investments, according to a Global Investor Survey by Legg Mason Global Asset Management.
The survey found Chinese investors aged 18-39 to be even more aggressive in their investment risk tolerance than the older group of Chinese investors aged 40-75. About 58% of the younger investors identified themselves as somewhat/very aggressive, compared to 49% of older Chinese investors aged 40-75. This is compared with a global average of 41% in the 40-75 age groups.
Similarly, younger Chinese investors’ preference in asset classes also leans more towards higher risk products. Younger Chinese investors consider equity income funds (60%) and high yield bonds (60%) as the top two asset classes to meet their income needs. In addition, six in 10 younger Chinese investors currently invest in high yield bonds, compared to only 37% of their older counterparts.
Interestingly, all surveyed younger Chinese investors (100%) are confident in their ability to manage their investments compared with 93% of surveyed Chinese investors across 40-75 age groups. Both of these percentages are higher than the global average of 86%.
Also, a higher percentage of younger Chinese investors believe that they have achieved progress over the past 12 months in different aspects of investment, including avoiding dependence on others in retirement (100%) and protecting personal wealth (91%). The 40-75 age group counterparts rated lower in comparison with 89% and 89% respectively in the same categories.
Looking ahead to the next 12 months, almost all younger Chinese investors (96%) are somewhat/very optimistic about their investments in comparison with older counterparts (87%), although Chinese investors as a group are already the most optimistic for the upcoming year (7.7 out of 10) when compared to the global average (7.3 out of 10).
“With the rise of the affluent class in China, we are seeing substantial growth in Chinese investors’ confidence in managing investments as well as an increasing need for income across the age segments. Our survey shows that the younger generation of investors are more confident in their investment abilities and are more aggressive but it would be beneficial for investors to work in partnership with Financial Advisors to help them explore opportunities that will diversify their portfolio, “said Freeman Tsang, director of Business Development – Head of China and Hong Kong for Legg Mason.
