While all the talk of globalisation suggests investment patterns are similar the world over, a study of Hong Kong, Singapore and Switzerland reveals widely varying behaviours.

While all the talk of globalisation suggests investment patterns are similar the world over, a study of Hong Kong, Singapore and Switzerland reveals widely varying behaviours.

LGT Group, the Liechtenstein-headquartered private bank, surveyed a total of 515 people in the three jurisdictions, with each person holding minimum of (excluding real estate) SFr900,000 ($1.02 million) in Switzerland, and in Hong Kong and Singapore, more than $1 million including real estate provided this was not used as the first or second home. The study, led by Professor Teodoro Cocca, was carried out by Johannes Kepler University in Linz, Austria.

Among the findings was that there are large cash portfolios in Asia. Private banking clients in Singapore invest around half their assets in cash funds. In Hong Kong this share is around one third, and around one quarter in Switzerland.

The data may suggest that wealth managers must take close account of regional differences in crafting the kinds of investment advice and services, rather than assume that most people around the world, once adjusted for personality type and age, have broadly similar ideas about money.

Commodities and gold are popular in Asia. The share of assets (excluding cash) invested in commodities/gold or precious metals is 28 per cent in Singapore and 14 per cent in Hong Kong, the survey found. In Switzerland this share only amounts to 8 per cent.

The popularity of shares varies in Asia: The proportion of assets (excluding cash) invested in shares is 61 per cent in Hong Kong but only 47 per cent in Singapore.

In Switzerland, investors prefer bonds. The share of assets (excluding cash) invested in bond amounts to 18 per cent in Switzerland. In Hong Kong the share is just 14 per cent, and only 13 per cent in Singapore. Low diversification also common in Asia: 67 per cent of interviewees in Singapore do not have sufficient diversification, i.e. less than four asset classes. In Hong Kong this group accounts for 45 per cent, and in Switzerland for 53 per cent.

Riskier in Hong Kong
A feature among interviewees from Hong Kong is their willingness to take risks, the survey found. Almost half of those questioned describe themselves as being comfortable with risk (Singapore: 26 per cent, Switzerland: 23 per cent).

The proportion of interviewees in Hong Kong who stated that they have a very good knowledge of investment matters is at 30 per cent, far higher than in the other two countries.

Hong Kong and Swiss investors aim for inflation-adjusted growth in value: In relation to the current year, inflation-adjusted growth in value is the most frequently cited return-on investment objective of interviewees in both Hong Kong (31 per cent) and Switzerland (27 per cent).

Singapore is benchmark-oriented: In Singapore the majority of interviewees is guided by the average performance of the market in relation to the return on their investments (40 per cent).