RETAIL investor confidence in the Singapore stock market and economy has slumped to its lowest levels in three-and-a-half years, according to a survey conducted by JP Morgan.
The JP Morgan Investors Confidence Index dropped 15 points to 101 in December 2015, its lowest since June 2012.
The half-yearly survey revealed that Singaporean investors have become increasingly pessimistic about the local economic environment, employment landscape and investment outlook.
Yet, investors' risk profiles and investment strategies remained fairly consistent over the past few years, and only a minority of investors plan to cut investments despite the more bearish sentiment.
Investors are also becoming increasingly conservative, with almost half of the respondents citing capital growth and preservation as their main objective for investing, and 24 per cent indicating that they invest to generate a stable income stream.
High dividend stocks remain a top pick for investors aiming to generate a stable income, with real estate investment trusts (Reits) coming in a close second. Reits have recently been gaining in popularity among investors, rising by four percentage points compared to the previous survey.
Meanwhile, more bond investors are choosing Singapore investment grade bonds and high yield bonds.
In the mutual funds market, investors have been allocating increasing amounts of money into balanced and multi-asset funds.
Brian Tan, JP Morgan's head of fund sales in Singapore, said that this increased interest in multi-asset and balanced funds reflects investors' need for flexibility and diversification, given today's challenging investment landscape. He also expects to see more volatility ahead.