A greater focus on financial wellbeing and savings are set to be amongst the lasting legacies of the pandemic for Southeast Asian investors, the Schroders Global Investor Study 2021 has found.
The flagship study, which surveyed nearly 24,000 individuals from 33 locations globally including Singapore, Malaysia, Thailand, and Indonesia, found that a vast majority of investors have spent more time considering their financial wellbeing and reorganising their personal finances since the onset of the pandemic.
Geographically, this change was most pronounced in Asia, with investors in Thailand (91%), Indonesia (88%) and India (88%) sharing this view strongly. Investors in Malaysia (85%) and Singapore (81%) also ranked highly.
Investors globally are now more likely to check their investments at least once a month (82%), compared with 77% of investors in 2019.
Additionally, over half of Southeast Asian investors (52%) will likely save more once the COVID-19 situation normalises. This is higher than the global average of 46%.
The study was conducted between March to August this year, at a time where many parts of Southeast Asia were largely closed-off, battling fluctuating lockdown cycles and slow vaccine rollouts. This is reflected in the relatively more cautious outlooks from investors in the region.
Increased vigilance towards retirement and savings
Over the course of 2020, almost a third (32%) of investors globally saved more than they had planned to. In Southeast Asia, 26% of investors had saved more than planned to, while 56% saved as much as they had planned. Unsurprisingly, this was driven by decreased spending on nonessentials, such as eating out, travel and leisure.
Of the investors who were unable to save as much as planned, 46% of people globally (57% in Southeast Asia) cited reduced salaries/work income as the key reason, which reflects the great challenges caused by the pandemic.
Cause for optimism
Despite the challenges, investor confidence has soared to its highest level since the study began in 2016, with average annual return expectations over the next five years expected to be 11.3%, an increase on 10.9% predicted a year ago.
This also mirrors the growing confidence of institutional investors recorded by Schroders in its corresponding Institutional Investor Study.
Investors from Southeast Asia were amongst the most bullish, with investors expecting annual total returns of 12.8% over the next five years, followed by investors in the Americas (12.5%), broader Asia (12.3%) and slightly more cautious investors in Europe with expectations of 9.7%.
Southeast Asian investors have also become more attentive to new investment opportunities that are reshaping the world. Over the past year, 63% of investors placed their money in stocks and funds invested in internet and tech companies, while 55% invested in crypto-currencies. Nevertheless, safe haven investments also gained traction, with 60% of investors in the region investing in gold, silver, and precious metals.