S’poreans prefer to invest at home than overseas
Singaporeans are more inclined to invest their cash at home than other investors around the globe, a study has found.
A survey by Legg Mason Global Asset Management has found that 59 per cent of Singaporean respondents are more focused on global investment opportunities than they were five years ago.
This is 16 percentage points less than the 75 per cent average for the rest of the world.
Another finding was that Singapore money was mainly invested at home, with 80 per cent of the total sums invested here.
But Mr Lennie Lim, Legg Mason managing director and Asia regional head, expects this to change. “We expect to see a change in their approach towards investing overseas with a view to diversifying risk and improving their return on investment,” he said in a statement.
Of the about 200 Singapore investors surveyed, slightly more than half – 52 per cent – of those who had no international exposure said they would still consider investing globally for income.
The survey, which collected responses from 4,320 investors across 20 nations from December last year to this January, also found Singaporeans were more disappointed with their investment yields this year.
Only four out of 10 investors thought they were making good progress in terms of generating income from investments for living expenses.
Actual average rates of return on income-producing investments were 5.4 per cent, which fell short of expectations at 8.5 per cent.
The gap of 3.1 percentage points is just over one percentage point higher than last year’s 1.9 percentage point. This was mainly attributed to investors’ “aggressive search for yield”, amid the rising cost of living in Singapore.
Still, Singapore investors were among the most self-assured in the world, ranking second in Asia after China, with almost eight out of 10 (77 per cent) surveyed confident in their investing abilities, and only 35 per cent currently working with a financial adviser.
Providing for retirement was singled out as an important reason for Singapore investors, with seven out of 10 ranking it their “primary investment goal”.
Mr Matthew Schiffman, managing director and head of global marketing at Legg Mason, said investors needed to have assets to provide for their retirement years.
“Our survey found that investors everywhere can, and should, do more to prepare for their retirement,” he added.
Mr Schiffman noted that some countries have social programmes to help their retiree populations. Singapore, for example, has the Supplementary Retirement Scheme, set up in 2001, to complement the Central Provident Fund.
The voluntary scheme allows a Singaporean or permanent resident over 18 years old to put up to $12,750 a year into a special account that can be opened at DBS Bank, OCBC Bank or United Overseas Bank.
The contributions enjoy tax relief, and may be used to buy various investments such as stocks and unit trusts and can be deposited with banks.
By Asiaone – malaysia-chronicle.com
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