Background and methodologies
Conducted by Cimigo in November 2020 via on-line questionnaire
Successfully interviewed – 843 Hong Kong residents who are aged 25-65 years old
Monthly personal income of HK$30,000+ or liquid assets of HK$500,000 or above.
Hong Kong investors are keen to invest in the next 12 months, particularly in equities (81% of the respondents. The same basis for the following) and deposits (73%)
- Millennials are more inclined to invest in foreign equities (44%); Baby Boomers favor deposits, in particular RMB deposits (41%).
Hong Kong (76%) and the Mainland (49%) are the preferred markets
- Baby Boomers favor China (61%) – optimistic about China’s economic outlook.
- Millennials are more inclined to invest in the US (58%).
Interest in China A-Shares is mixed
- 42% express interest. Key reasons for interest: positive outlook about the China economy (67%) and expected appreciation of RMB (46%).
- 58% have limited or no interest. Reasons: uncertainty about how the China regulatory framework operates (46%), and the stock market lacks transparency (40%).
- Baby Boomers (52%) are more interested in China A-Shares than other cohorts.
Savings account (94%), stocks (79%) and insurance (71%) are the key products owned by respondents.
- 37% have invested in funds, with higher penetration amongst baby boomers (46%).
- Respondents have allocated 24.6% of their portfolios to funds, with slightly higher % amongst Baby Boomers (25.7%) and Gen X (25.2%).
In the next 12 months, 50% will be investing in funds, 46% will purchase ILAS and 75% in ETFs
- Interest in ETFs is higher amongst the millennials (81%). ETFs are perceived to be flexible and easier to move in/out.
- Reasons for investing in funds: an instrument for medium to long-term investment (57%), and helps to diversify (54%).
- Key reasons for not investing in funds: perception that fees are high (46%). General market volatility (30%) causes respondents to take a short-term approach rather than a longer-term approach.
Distribution policy offered by retail funds is appealing but is not seen as a top criterion in selecting funds
- Across all types of fund products, 54% of the respondents believe that distribution is a key factor.
- For post-retirement products, this feature is particularly important (70%).
Interest in purchasing Mainland wealth management products in Hong Kong is mixed
- For the 45% who express interest, the appeal lies in China’s positive economic prospect (69%) and the expected RMB appreciation (51%).
75% of the respondents have heard about ESG investment, but have relatively low understanding of and interest in ESG investment
- While most have heard about ESG (75%), they don’t know much about the details (e.g. ESG rating criteria, regulation).
- Amongst those who have heard about ESG investment, 21% express interest in investing in ESG products.
High usage of digital channels to invest in funds
- Management fees (51%) and subscription fees (40%) are the key consideration when selecting an investment channel.
- Most primarily invest via websites and apps.
- Baby boomers favor human touch, and prefer to talk to bank relationship managers (“RM”). Key reasons: can negotiate fees, and can also determine whether the advices given by the RMs are sound or not.
Millennials (45%) are more ready to use virtual banks than other cohorts
- 40% plan to use virtual banks in the next 12 months.
- Attractive deposit interest rates (53%) and lower commission/transaction fees (47%) are key reasons for using virtual banks.
- Barriers: concerns about cyber security (56%), not familiar about the VB background (49%); as well as no one to turn to when encounter problems (37%). Some also indicate they do not see the edge of virtual banks over the digital arms of traditional banks. (22%)
Usage of Robo-advisor is low (24%), though 32% indicate they intend to use Robo-advisor (“RA”) in the next 12 months
- For those who intend to use RA, lower commission/transaction fees (47%) as well as convenience and speed of execution (41%) are key attractions.
66% of the respondents usually or occasionally seek advice before buying funds
- Mainly turn to electronic media (27%) and family members/friends (24%).
- Millennials typically turn to online forums and social media/financial KOLs (23%) for information/advice. Baby boomers still rely heavily on banks’ relationship managers (27%).