Sydney, (1 December 2020) – PIMCO today released the results of a survey which show that investors’ expectations, actions and intentions may not always be consistent, particularly in periods of volatility. According to PIMCO, who commissioned the Asia Pacific study, this finding underscores the importance of understanding possible biases affecting investment decision-making.
In the first of what will be a regular investment sentiment survey to gauge sentiment and outlook in challenging times, PIMCO found that investment biases can lead to potential inconsistencies in investor behaviour and that attitudes of Australian investors vary from other investors across the APAC region.
The survey found that Australian investors’ portfolios have been harder hit by COVID-19 than most, with 60% of Australian respondents claiming the virus has had a negative impact on their investments, compared with an average of 51% across the five APAC markets surveyed. Despite this, many more Australians expect growth in their portfolios in the coming 12 months than foresee a contraction. And more Australians expect national and regional economic growth than their counterparts in the other APAC markets surveyed.
In terms of who they trust to inform their investment decisions, most Australian investors put faith in their own experience and investment history: 59% say this always or often contributes to their investment decisions, compared with an APAC average of 48%. And Australians are much more likely than the regional average to heed advice from investment experts. Most value the input of professional advisors (58% always or often incorporate this into their decisions, compared with an APAC average of 36%). They are also more likely to trust information published by asset managers, financial institutions and investment consultants.
Commenting on these findings, Adrian Stewart, Head of Client Management APAC ex-Japan, said: “PIMCO has been a strong advocate for the benefit of advice and we were pleased but not surprised to see the level of trust that Australian investors have in their financial advisers. Relying on the expertise of investment specialists can be a helpful way of combatting cognitive and emotional biases when investing.”
Across APAC, the survey identified a number of inconsistencies in investor behaviour, such as investors expecting portfolio growth amid shrinking economies and seeking cash but claiming the best strategy is to time the market.
Kimberly Stafford, Head of PIMCO Asia-Pacific, said “At PIMCO, we have long believed that a deeper understanding of cognitive and emotional biases helps mitigate their effects and should help our clients make better investment decisions. This regional survey is an integral part of the firm’s long-term efforts to support diverse and robust research around behavioural science.”
Access PIMCO APAC Investor Sentiment Survey findings at: https://www.pimco.com.au/en-au/behavioral-science/apac-investor-sentiment-survey.