Schroders Global Investor Study 2021: Increased focus on financial wellbeing and savings set to be lasting legacy of pandemic for Southeast Asian investors
A greater focus on financial wellbeing and savings are set to be amongst the lasting legacies of the pandemic for Southeast Asian investors, the Schroders Global Investor Study 2021 has found.
The flagship study, which surveyed nearly 24,000 individuals from 33 locations globally including Singapore, Malaysia, Thailand and Indonesia, found that a vast majority of investors have spent more time considering their financial wellbeing and reorganising their personal finances since the onset of the pandemic.
Geographically, this change was most pronounced in Asia, with investors in Thailand (91%), Indonesia (88%) and India (88%) sharing this view strongly. Investors in Malaysia (85%) and Singapore (81%) also ranked highly.
Investors globally are now more likely to check their investments at least once a month (82%), compared with 77% of investors in 2019.
Additionally, over half of Southeast Asian investors (52%) will likely save more once the Covid-19 situation normalises. This is higher than the global average of 46%.
The study was conducted between March to August this year*, at a time where many parts of Southeast Asia were largely closed-off, battling fluctuating lockdown cycles and slow vaccine rollouts. This is reflected in the relatively more cautious outlooks from investors in the region.
This more measured approach also flowed through investors’ retirement outlooks, with 65% of retirees in Southeast Asia (versus 58% of retirees globally) now more conservative in terms of spending their retirement savings, while 75% (versus 67% globally) of those yet to retire now want to save more towards their retirement.
Over the course of 2020, almost a third (32%) of investors globally saved more than they had planned to. In Southeast Asia, 26% of investors had saved more than planned to, while 56% saved as much as they had planned. Unsurprisingly, this was driven by decreased spending on non-essentials, such as eating out, travel and leisure.
Of the investors who were unable to save as much as planned, 46% of people globally (57% in Southeast Asia) cited reduced salaries/work income as the key reason, which reflects the great challenges caused by the pandemic.
Despite the challenges, investor confidence has soared to its highest level since the study began in 2016, with average annual return expectations over the next five years expected to be 11.3%, an increase on 10.9% predicted a year ago.
This also mirrors the growing confidence of institutional investors recorded by Schroders in its corresponding Institutional Investor Study.
Investors from Southeast Asia were amongst the most bullish, with investors expecting annual total returns of 12.8% over the next five years, followed by investors in the Americas (12.5%), broader Asia (12.3%) and slightly more cautious investors in Europe with expectations of 9.7%.
Stuart Podmore, a behavioural investment insights specialist at Schroders, commented: “The pandemic has heightened our sense of uncertainty and challenged our ability to process risk, making many of us feel more anxious and out of control. These sentiments can clearly be seen in the results of our survey, with investors increasingly focused on saving, monitoring retirement contributions and checking their investments more frequently. Despite the huge challenges we have all encountered, it is encouraging to see that the pandemic has acted as a catalyst for promoting a stronger focus on generic financial planning and wellbeing. At the same time, we need to exert caution over the investment returns we expect over the coming five years, as the outlook shared by many investors – and in particular those who believe themselves to be experts – is exceptionally optimistic. The past 18 months have taught us that the future remains difficult to predict and a measured, consistent and patient approach to investing, focused on long term objectives and probable outcomes, is likely to stand investors in better stead.”
Highlights from the Singapore survey can be viewed here, while the Indonesia, Malaysia and Thailand survey highlights are in the attached infographics. To find out more about the Schroders Global Investor Study 2021, please click here.