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 third edition of our 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 in challenging times. KEY REGIONAL RESULTS arrow_downward Macro Sentiment Catching Up with Portfolio Sentiment The previous two surveys saw huge gaps between respondents' optimistic views of their own portfolio's growth prospects, on the one hand, and their relative pessimism about the growth of the wider economies. These gaps have closed rapidly over the course of the three quarters surveyed, but investors still tend to be much more optimistic about their own investments than about the economy in general. The rapid recovery of macroeconomic sentiment may be an accurate reflection of the success of COVID-19 vaccinations in some countries. However, investors should beware biases that lead them to overreact to news that may only tell part of the story. APAC Investor Sentiment Indicator (% expecting growth minus % expecting contraction over next 12 months. Excludes "no change" responses) Sentiment Indicator Charts APAC Australia Hong Kong Japan Singapore Taiwan APAC Portfolio Home Market Economy APAC Economy Global Economy -60 -40 -20 0 20 40 60 80 100 67 78 81 -14 23 40 -8 34 50 -24 13 39 More Expect Contraction More Expect Growth Australia Portfolio Home Market Economy APAC Economy Global Economy -60 -40 -20 0 20 40 60 80 100 70 85 89 4 59 74 5 55 64 -16 27 53 More Expect Contraction More Expect Growth Hong Kong Portfolio Home Market Economy APAC Economy Global Economy -60 -40 -20 0 20 40 60 80 100 73 84 80 -35 -10 5 -16 23 38 -33 -5 17 More Expect Contraction More Expect Growth Japan Portfolio Home Market Economy APAC Economy Global Economy -60 -40 -20 0 20 40 60 80 100 35 46 54 -49 -20 1 -31 14 30 -38 6 29 More Expect Contraction More Expect Growth Singapore Portfolio Home Market Economy APAC Economy Global Economy -60 -40 -20 0 20 40 60 80 100 68 84 88 -13 40 57 -8 43 57 -20 24 48 More Expect Contraction More Expect Growth Taiwan Portfolio Home Market Economy APAC Economy Global Economy -60 -40 -20 0 20 40 60 80 100 91 92 93 22 45 64 7 39 62 -14 13 46 More Expect Contraction More Expect Growth Load More Q3 2020 Q4 2020 Q1 2021 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 asked: 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? Investor Confidence Continues to Improve Confidence in achieving investment outcomes has continued to grow in Q1 2021, albeit at a slower rate than the previous quarter. Majorities now expect to achieve better-than-average investment returns, outperform the benchmark and meet their investment goals over the next 12 months. That so many respondents anticipate achieving higher-than-average returns may be an indication of the overconfidence effect, which can lead investors to over-estimate the likely performance of their holdings. Confidence in ability to get better than average investment return over the next 12 months (APAC, % respondents very/somewhat confident) Q3 2020 Q4 2020 Q1 2021 Confidence to get better than average investment return in next 12 months 42 53 57 Confidence to outperform benchmark index in next 12 months 39 50 52 Confidence to meet your investment goal in next 12 months 48 59 63 Question asked: How confident are you that you will be able to do the following over the next 12 months? Cash No Longer Most Sought-After Asset Perhaps reflecting the ongoing surge in optimism among investors in the region, cash and equivalents have fallen out of the top three most in-demand assets according to the Asset Outlook Indicator. At the end of Q1 2021, the top two assets likely to be in most demand over the next three months were developed and emerging market equities, followed by dedicated environmental, social and governance (ESG) assets. APAC Asset Outlook Indicator: Top Three Most In-Demand Assets (% expecting to buy minus % expecting to sell in next three months) Q3 2020 Q4 2020 Q1 2021 Developed Markets Equities 7 8 13 Emerging Markets Equities 3 9 13 Dedicated ESG Assets 8 9 11 The indicator is calculated by taking the percentage of those expecting to buy and subtracting the percentage expecting to sell over the next 3 months. It excludes "no change" and "don't know" responses. Question asked: Look forward to the next three months. How do you expect your exposure to the following assets to change?
APAC Portfolio Home Market Economy APAC Economy Global Economy -60 -40 -20 0 20 40 60 80 100 67 78 81 -14 23 40 -8 34 50 -24 13 39 More Expect Contraction More Expect Growth
Australia Portfolio Home Market Economy APAC Economy Global Economy -60 -40 -20 0 20 40 60 80 100 70 85 89 4 59 74 5 55 64 -16 27 53 More Expect Contraction More Expect Growth
Hong Kong Portfolio Home Market Economy APAC Economy Global Economy -60 -40 -20 0 20 40 60 80 100 73 84 80 -35 -10 5 -16 23 38 -33 -5 17 More Expect Contraction More Expect Growth
Japan Portfolio Home Market Economy APAC Economy Global Economy -60 -40 -20 0 20 40 60 80 100 35 46 54 -49 -20 1 -31 14 30 -38 6 29 More Expect Contraction More Expect Growth
Singapore Portfolio Home Market Economy APAC Economy Global Economy -60 -40 -20 0 20 40 60 80 100 68 84 88 -13 40 57 -8 43 57 -20 24 48 More Expect Contraction More Expect Growth
Taiwan Portfolio Home Market Economy APAC Economy Global Economy -60 -40 -20 0 20 40 60 80 100 91 92 93 22 45 64 7 39 62 -14 13 46 More Expect Contraction More Expect Growth
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