AS the number of high-net-worth (HNW) investors in the region increases, Asia ex-Japan asset managers see wealth preservation, absolute return, and income generation as their top three investment considerations, according to findings in the June issue of The Cerulli Edge - Asian Monthly Product Trends.
Asian countries have the largest growth of HNW populations, compared to other regions. According to Knight Frank’s 2019 Wealth Report, eight of the top 10 countries by future growth of ultra-HNW populations over the next five years are forecast to be in Asia, with India taking the top spot at 39% growth, followed by the Philippines at 38% and China at 35%.
Four-fifths (80.0%) of managers say the top priority of their HNW and ultra-HNW clients is wealth preservation, while 67.3% and 60.3%, respectively, named absolute return and income generation as the main consideration. HNW clients’ need for wealth preservation might have been amplified recently due to the volatility exacerbated by the global coronavirus outbreak.
In terms of preferred fund strategies, alternatives, multi-asset, and fixed income were named by managers as the top three most sought-after by their wealthy clients. Multi-asset allocation strategies are becoming increasingly relevant amid the uncertain economic climate caused by the coronavirus pandemic.
The outlook for thematic funds is also strong, particularly for healthcare and technology funds. Both sectors might be on managers’ and investors’ radars during the current pandemic.
Despite the opportunities available for managers in the HNW space, they deem competition from other managers offering exotic investment strategies as their main challenge, with the majority (71%) citing it as their top concern.