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Jan 05, 2023 / 21:25

Gold of high interest for Vietnamese investors to combat inflation

As many as 73% of Vietnamese investors still believe in digital assets, despite market turbulence in 2023.

In 2023, gold continues to be highly interesting to Vietnamese investors, with 57% saying they have invested due to inflation.

It is one of the three key interests for Vietnamese investors, which was revealed by Standard Chartered’s Wealth Expectancy Report 2022.

The UK-based bank also said in addition to combating inflation in 2022, there is interest in value stocks, as 49% of respondents said, and bonds, 44%.

Sustainable investments will continue to receive investor interest and capital even though greenwashing concerns persist. More than half of global investors (52%) expect to increase their sustainable investments in 2023. Some 54% of investors in Vietnam will also do so.

Harmander Mahal, Head of Consumer, Private & Business Banking, Vietnam and Asia Cluster Markets, said with the rapid development of the capital markets, investors in Vietnam are getting a lot more sophisticated, and their investment needs are getting more demanding, especially amongst the fast-growing affluent segment. 

He added: “As the market matures, investors will increasingly turn to professionally managed products, and demand for more diverse product range would increase. The recent developments in the private corporate bonds space, together with the current volatility in the capital market and rising inflation, is fast-tracking the shift to professionally managed investments in Vietnam.”

Source: Wealth Expectancy Report 2022

Standard Chartered’s Wealth Expectancy Report 2022 examines the shifts in investor decisions for more than 15,000 emerging affluent, affluent, and high net worth (HNW) investors in 14 markets – including Vietnam – along with the resulting movements in major asset classes. Survey results show 80% of local investors are more actively managing their wealth and making changes to their investment strategies, given current economic challenges.

Outpacing inflation 

Vietnamese investors cited inflation (36%), the threat of recession (21%), and an uncertain global economy (18%) as their top concerns. Rising inflation (34%), a recession (27%), and an uncertain global economy (22%) are key worries for investors internationally too. 

In the past year, local investors have changed their finances, such as making new decisions around their portfolios (26%) and spending less (25%), which will prompt shifts in major asset classes.

To outpace inflation, 61% of global investors want to reduce their cash holdings, compared to 62% in Vietnam. Standard Chartered predicts that global cash allocations will fall from 26% in 2022 to 15% in 2023, as indicated by investor responses.

Investors are reconsidering their holdings of equities as market volatility increases, although this asset class will remain an integral part of portfolios. Of those currently invested in equities, there is an indication that the allocation of equities in Vietnamese portfolios to fall from 10.9% to 7.5% in the next year based on survey responses.

Digital assets continue to interest investors

 The research reveals that 73% of local investors still believe digital assets are an important part of any investment portfolio, despite multiple setbacks in the market this year.

About 66% of global investors hold digital assets, compared to 80% in Vietnam. Looking ahead, as many as 74% of local investors surveyed plan to increase their investments in digital assets in the coming year. This is in part because 41% consider them to be a good way to diversify their portfolios, and many said they have seen people make significant returns off digital assets (33%). 

However, it is important to note this survey was conducted before the FTX crash, and the events of the past few weeks may dampen this sentiment.

Helping investors make better decisions

While most global investors polled (62%) were primarily managing their own finances, with some variation across markets, many investors in Vietnam (33%) use professional wealth managers. 

On average, across the 14 markets, younger (18-35) investors (63%) are more likely to use a professional than 39% in the 55+ bracket. On average, investors taking advantage of professional advice were more likely to have diversified portfolios and higher holdings in sustainable investments.

Marc Van de Walle, Global Head, Wealth Management, said: “Investors face a complex reality, with inflation, the threat of recession, and an uncertain global economy ranking as their top concerns. Our research reveals that they are making changes to their portfolio allocations in response to these challenges, but it is important that they make decisions aligned with their objectives and the external environment."

“We believe diversified portfolios with multi-asset income generation strategies provide some of the best opportunities today. This, combined with personalized advice, can help investors ride out the current market conditions and achieve their long-term goals.”

This 2022 edition is the third iteration since 2019. The research was conducted across 14 markets, including Mainland China, India, Pakistan, UAE, Vietnam, Hong Kong, Kenya, Nigeria, Indonesia, Taiwan (China), Malaysia, Thailand, Singapore, and South Korea.