02 Feburary 2016
2 in 3 Singapore investors regret not planning their investments better – Manulife survey
- With 1 in 3 carrying debt1 excluding mortgages, Singapore has the third highest proportion of investors in debt among Asian markets surveyed.
- Singapore investors not transferring knowledge to next generation
- Investor sentiment towards Singapore and China plunges to all-time low
SINGAPORE – The latest Manulife Investor Sentiment Index (MISI) survey revealed that although Singapore investors are diligent in saving and tracking their expenses, one in three (33%) hold debt1 excluding mortgages and the majority regret not planning their investments better (69%). When asked about their reasons for regret, investors cited not being more proactive in reviewing their portfolio (27%), and holding too much money in cash instead of making more investments (26%) as the top factors.
Singapore investors generally performed better in saving and tracking their expenses than their regional counterparts, with saving for retirement cited as their top financial priority. Despite this, Singapore has the third highest proportion of investors in debt1 across the eight Asian markets surveyed.
Close to half (46%) of indebted investors in Singapore owe S$10,000 or more, and 44% expect to take longer than one and a half years to clear their debt. The top contributor to investors’ debt was daily living expenses such as food, utilities, and transportation, followed by discretionary expenses, such as clothes, entertainment, and travel. In addition, more male investors are in debt compared to female investors (37% versus 28%), with a significantly higher average debt amount of $40,985 as compared to $25,502.
Naveed Irshad, President and Chief Executive Officer of Manulife Singapore, commented on the findings:
"Singapore investors are taking steps in the right direction by working hard to keep track of their expenses and save for retirement. However, their debt burdens may be holding them back from achieving their financial goals. We encourage Singaporeans to look at planning their finances holistically, from making the most of their savings to protecting their wealth and securing a comfortable retirement."
Singapore investors not transferring knowledge to next generation
Close to half (44%) of Singapore investors who are parents do not teach their children about financial planning. 31% of these parents believe that children should learn on their own, while close to one in four attributed their inaction to their own lack of knowledge about financial planning (24%). However, when surveyed, 41% of young investors below the age of 35 cited their parents as the second most influential source of financial planning advice after themselves.
Investors pessimistic towards home and China markets
Singapore investors are feeling the effects of the lacklustre global economy, with sentiment towards the Singapore market dropping eight points in Q4 2015 to 21 points.
Investor sentiment towards China also plummeted by 19 points, reaching an all-time low of 5 points since this was first measured in Q2 2014. Most investors appear to be adopting a wait and see approach towards China, with close to half (48%) saying they would avoid investing further in China until its economy improves, and 43% feeling unsure about what is the best strategy for investing in China.
Wendy Lim, Chief Executive Officer of Manulife Asset Management (Singapore) commented:
"As Singapore’s top trading partner and one of the country’s key investors, any movement in China is bound to affect our economy. It is times like these that highlight the importance of building and having a diversified portfolio invested in different geographies and asset classes. Alternatively, retail clients can look to invest in a multi-asset fund that is dynamically managed across economic cycles to help ride through today's volatile market."
1Examples of debt include personal loans, student loans, credit card debts etc. Mortgages are excluded.
For more findings and related information from the Manulife Investor Sentiment Index in Asia, please visit manulife.com.sg
About Manulife Investor Sentiment Index in Asia
Manulife’s Investor Sentiment Index in Asia (Manulife ISI) is a half-yearly, proprietary survey measuring and tracking investors’ views across eight markets in the region on their attitudes towards key asset classes and issues related to personal financial planning.
The Manulife ISI is based on 500 online interviews in each market of Hong Kong, China, Taiwan, Japan, Singapore, Malaysia, Indonesia and the Philippines. Respondents are middle class to affluent investors, aged 25 years and above who are the primary decision maker of financial matters in the household and currently have investment products.
The Manulife ISI is a long-established research series in North America. The Manulife ISI has been measuring investor sentiment in Canada for the past 17 years, and extended this to its John Hancock operation in the U.S. in 2011 and Asia in 2013. Asset classes taken into Manulife ISI Asia calculations are stocks/equities, real estate (primary residence and other investment properties), mutual funds/unit trusts, fixed income investment and cash.
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