With interest rates at their highest level in over a decade, Asia Pacific investors have allocated nearly half of their assets in cash and related products, according to a survey by Fidelity International.
The average investor in APAC has almost half (48 percent) of their current asset allocation in cash savings and term deposits, according to a survey by Fidelity International (FIL). And in the next 12 months, 40 percent of investors in the region plan to increase their cash positions while 24 percent plan to add to term deposits.
«[A] significant number of investors are sticking with a high proportion of their assets in term deposits or cash. While cash is great for maintaining liquidity and flexibility, having too much cash on the sidelines as interest rates come down is most likely to hurt overall financial returns,» said Terrence Kan, client portfolio strategist at FIL.
Improving Risk Appetite
Nonetheless, many APAC investors are also seeking to add risk assets, likely due to expectations of interest rate cuts in the US. 53 percent and 28 percent of investors plan to increase investment in equities and bonds, respectively. 64 percent are looking to invest in income-producing assets.
In terms of the top exposures, APAC investors held equities (67 percent) term despots (63 percent) and insurance-related products (58 percent).
The survey was conducted by YouGov, a public opinion and data firm, between May 15 and 24 this year. Respondents were 18-69 years old from six markets in APAC including Australia, mainland China, Hong Kong, Japan, Singapore and Taiwan.
