PIMCO APAC Investor Sentiment Survey Q1 2021

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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 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.

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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

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

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 and Regional Summaries

APAC Survey Results Q1 2021

Read more about the key results of our Q1 2021 survey for the entire APAC region.

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Australian Survey Results Q1 2021

What did we discover about investors in Australia in our Q1 2021 survey? Download the summary to find out.

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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. Respondents in each survey wave have not participated in previous waves.

Disclosures

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


PIMCO Australia Pty Ltd ABN 54 084 280 508, AFSL 246862. 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. To the extent it involves Pacific Investment Management Co LLC (PIMCO LLC) providing financial services to wholesale clients, PIMCO LLC is exempt from the requirement to hold an Australian financial services licence in respect of financial services provided to wholesale clients in Australia. PIMCO LLC is regulated by the Securities and Exchange Commission under US laws, which differ from Australian laws.