Investor Survey Reveals Hong Kong’s Cautious Stance on Investments

Local investors in Hong Kong are content to keep their money in cash and deposits until interest rates drop to 2.5 per cent, as per a survey conducted by the Hong Kong Investment Funds Association. The survey, which involved 500 Hong Kong investors aged between 25 and 64, revealed that more than half of the respondents prioritize collecting regular interest from their investments. This sentiment was echoed by 55 per cent of retail investors who expressed optimism about the global economy in the coming year, with 52 per cent also feeling positive about the economic prospects of Hong Kong and mainland China.

Despite the favorable economic outlook, many investors remain cautious about allocating more cash into investments, indicating a defensive sentiment among respondents. The study highlighted a strong “home market bias” among local investors, with 72 per cent showing primary interest in investing in the Hong Kong market and 63 per cent focusing on mainland China. However, the survey emphasized the importance of diversifying investments globally to construct a balanced portfolio and mitigate risks. Additionally, the performance of funds concentrated on China and Hong Kong equities has been relatively low this year, with returns averaging between 3.4 to 5.9 per cent, while Europe, India, and Taiwan equities emerged as the top-performing fund categories, yielding returns between 16.9 to 18.4 per cent.

Interest in specific sectors among Hong Kong investors was notable as the survey found a keen focus on artificial intelligence, healthcare, green or ESG-related industries, and the banking and finance sector. The results of the survey underline the cautious yet optimistic approach of local investors in Hong Kong as they navigate the investment landscape amid changing economic conditions.