PIMCO APAC Investor Sentiment Survey Q3 2020

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How does volatility affect investors in Asia-Pacific markets: not just their portfolios, but their outlook, expectations and confidence in their own decision-making?

This is the first in what will be a regular survey of 2,500 investors with liquid assets of US $100,000 or more across five Asia-Pacific markets to gauge sentiment and outlook amid challenging times.

Asia-Pacific Investors See Ongoing Disconnect Between Portfolios and Economies

Our survey shows a far greater proportion of Asia-Pacific investors are confident that their own portfolios will grow in the next year than think the same about regional and global economies.

Though this in line with the divergence between equity markets and GDP data in recent months (across the region, equities comprise an average of 42% of investors' portfolios), investors should be cautious about the influence of status quo bias.

APAC Investor Sentiment Indicator

(% expecting growth minus % expecting contraction over next 12 months. Excludes "no change" responses)

Portfolio Home Market Economy APAC Economy Global Economy

APAC

-60
-40
-20
0
20
40
60
80
100
67
-14
-8
-24
More Expect Contraction More Expect Growth

Australia

-60
-40
-20
0
20
40
60
80
100
70
4
5
-16
More Expect Contraction More Expect Growth

Hong Kong

-60
-40
-20
0
20
40
60
80
100
73
-35
-16
-33
More Expect Contraction More Expect Growth

Japan

-60
-40
-20
0
20
40
60
80
100
35
-49
-31
-38
More Expect Contraction More Expect Growth

Singapore

-60
-40
-20
0
20
40
60
80
100
68
-13
-8
-20
More Expect Contraction More Expect Growth

Taiwan

-60
-40
-20
0
20
40
60
80
100
91
22
7
-14
More Expect Contraction More Expect Growth

The indicator is calculated by taking the percentage of those expecting growth and subtracting the percentage expecting contraction over the next 12 months. It excludes “no change” responses.

Questions: What are your return expectations over the next 12 months (from today) for your investment portfolio? How do you expect your home economy/the APAC economy/the global economy to perform over the next 12 months?

COVID-19 Has Hit Portfolios and Investor Confidence – and Will Continue To Do So

Despite their optimism, the pandemic has hit investors' confidence in their own decision-making: almost half (43%) say COVID-19 has had a negative impact, and 44% expect it to continue to do so. This is probably because a majority (51%) say COVID-19 has had a negative impact on their portfolios so far, with 10% saying it has had a major negative impact. Almost half (47%) expect it to continue to have a negative impact.

Impact of COVID-19

(% respondents reporting negative impact)

Minor Negative Impact Major Negative Impact

Your Portfolio

60%
50%
40%
30%
20%
10%
0%
41% 10%
Impact So Far
39% 9%
Impact In Future

Confidence in Your Decision Making

60%
50%
40%
30%
20%
10%
0%
34% 9%
Impact So Far
35% 9%
Impact In Future

Questions: Consider the impact of the COVID-19 pandemic so far, and going forward. How much of an impact do you think it has had, and will continue to have, on the following?

Asia-Pacific Investors Set To Increase Exposure To Cash, Multi-Asset Strategies and ESG Assets

A greater proportion of Asia-Pacific investors intend to seek higher exposure to cash, multi-asset strategies and ESG assets in the coming three months than the proportion looking to reduce exposure to those assets. Some 42% say they are very or somewhat likely to significantly rebalance or reallocate their portfolios in the coming quarter.

APAC Asset Outlook Indicator: Top Three Most In-Demand Assets

(% expecting to buy minus % expecting to sell in next three months)

Cash, Cash-Like Investments, or Savings

18

Multi-Asset Strategies

9

Dedicated ESG Assets

8

Questions: Look forward to the next three months. How do you expect your exposure to the following assets to change? Excludes "no change" and "don't know" responses.

Asia-Pacific Investors See Opportunity in Adversity

Almost half (48%) of Asia-Pacific investors feel the best strategy in periods of market uncertainty is to try to time the market to buy risky assets as they get cheaper or seem more likely to grow quickly in the new environment. Despite cash being in demand (see above), less than one-quarter (24%) claim selling risk and hoarding cash is the best idea in periods of market stress, suggesting a discrepancy between theory and practice.

Though there is no perfect answer, investors should be wary of succumbing to various biases that might affect their decision making, especially in times of volatility.

Favoured Strategy in Periods of Market Uncertainty

(% Respondents, APAC)

Questions: Which of the following do you feel most strongly is the best course of action in periods of market uncertainty? Respondents selected from one of three choices.

Asia-Pacific Investors Still Trust Their Own Instincts

Despite the COVID-19 pandemic hitting many APAC investors' confidence in their own decision-making, they continue to trust their own history and experience most in making investment decisions – above professional advice and information from international news media.

Most distrusted and seldom used in investment decision-making are family recommendations and local news – perhaps reflecting awareness of the need for impartial information sources during the pandemic, and of the need to counteract possible biases affecting decision-making.

Most and Least Trusted Information Sources

(% Respondents, APAC)

Your own experience and investment history

48% 12%

Professional advice

36% 22%

International news media

28% 23%

Material published by financial institutions

27% 25%

Material published by asset managers

25% 27%

Material published by investment consultants

24% 30%

Local news media

22% 32%

Recommendations from friends and family

20% 40%

Always/Often Trust Seldom/Never Trust

Questions: Which sources of information do you trust and use in your investment decision-making? Responses selected from Always/Often/Sometimes/Seldom/Never.

APAC and Regional Summaries

APAC Survey Results Q3

Read more about the key results of our Q3 survey for the entire APAC region.

Download

Australian Survey Results Q3

What did we discover about investors in Australia in our Q3 survey? Download the summary to find out.

Download

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Behavioral Science in Uncertain Times

About the Survey

We surveyed 2,500 investors across five Asia-Pacific markets, 500 in each of Australia, Hong Kong, Japan, Singapore, and Taiwan. "APAC" results refer to responses across all five markets.

Respondents had to have had some experience with investing, and liquid assets (excluding property and mandatory pension funds) of US$100,000 or more. We sought to ensure broadly representative ratios of age and gender were included within each sample.

The survey will be repeated at regular intervals.

Disclosures

Sydney
PIMCO Australia Pty Ltd
ABN 54 084 280 508
AFS Licence 246862
Level 19, 5 Martin Place
Sydney, NSW 2000
Australia
612-9279-1771


PIMCO Australia Pty Ltd ABN 54 084 280 508, AFSL 246862 (PIMCO Australia). This publication has been prepared without taking into account the objectives, financial situation or needs of investors. Before making an investment decision, investors should obtain professional advice and consider whether the information contained herein is appropriate having regard to their objectives, financial situation and needs.

Methodology

This survey was conducted online within the Australia, Hong Kong, Singapore, Taiwan and Japan markets from August 7 through August 25, 2020, among 2,500 adults (500 in each market) aged 25 and older. All respondents had over US$100,000 in investable liquid assets and at least some experience with investing beyond their pension and superannuation accounts. This online survey is not based on a probability sample and therefore the theoretical sampling error cannot be calculated. 

Charts, graphs and statistical information referenced in this publication are all derived from the result of the survey. Data collected from the participants/ respondents are for the sole purpose of this survey. Charts and graphs represented are for illustrative purposes only.

The survey results contain the opinions of the respondents and not necessarily those of PIMCO. The data contained within the report may not be related to any PIMCO product or strategy and should not be relied upon for any investment decision. 

Past performance is not a guarantee or a reliable indicator of future results.  All investments contain risk and may lose value.  This report is provided for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product, nor construed as a solicitation or offer to buy or sell any securities or related financial instruments in any jurisdiction.

Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a trademark of Allianz Asset Management of America L.P. in the United States and throughout the world. ©2020, PIMCO.