A recent study by British multinational asset management company, Schroders has shown that a majority of Malaysian investors are now re-assessing their investment strategies for the following year. This comes as the global economy enters a period of slower growth, plagued by factors like higher inflation and geopolitical uncertainties.

Revealed in the Schroders Global Investor Study 2023 – which polled 23,000 investors from 33 locations around the world – it was found that almost 78% of Malaysian investors believe that the world is now entering a new era of policy and market behaviour, characterised by higher inflation and interest rates. In comparison, last year’s respondents said that they believe these market challenges are only temporary, and that the market will return to an environment with low inflation and low rates.

Accordingly, 57% of Malaysian investors said that they have adjusted their investment strategies to match this change, and a third intend to do so as well. The study also showed that those who ranked themselves as investment experts were the quickest to respond to the situation, with 89% of them having already adapted their strategy. Meanwhile, 47% of respondents who ranked themselves as beginners said that they have yet to do so.

That said, the study also highlighted investors’ overall optimism for 2024, where 92% of them said that they expect returns to be either identical to or higher than last year; notably, only 2% of expert investors said that they think next year’s returns may be lower. On top of that, a majority of Malaysian investors expect annual returns of 12.40%, which is higher than the global average indicated in Schroders’ study (11.5%).

On the types of investments that are most well-received, 50% of Malaysian investors said that they are increasingly interested in actively managed investment and mutual funds. This is followed by private assets (46%) and cryptocurrencies (44%) – with private assets seeing a fair bit of interest in particular. To illustrate, those surveyed said that they are ready to allocate 15.11% of their funds into private assets on average (22.01% for expert investors); 33% of them further shared that they are attracted to private equity – an investment instrument that falls under private assets – followed by real estate (26%) and infrastructure and renewable energy (21%).  

Despite this interest in private assets, however, there are some obstacles that may ultimately impact investors’ actual investment in it. These include the fact that 59% of Malaysian investors still have limited knowledge about private assets, indicating that further efforts are needed to educate the public. On top of that, 63% said that the expenses associated with private assets is still a barrier.

To note, the Schroders Global Investor Study is Schroders’ flagship study, which is conducted on an annual basis. This time round, it was carried out across Europe, Asia and the Americas – including Indonesia, Malaysia, Singapore and Thailand in Southeast Asia (SEA) – and took place online between May to July 2023.

(Sources: Schroders, BusinessToday)

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