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Singapore investors have unrealistic income expectations: Schroders survey

Wednesday, September 14, 2016 - 13:38

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Singapore investors are an overly-optimistic lot, with the millennials here particularly more bullish and confident of their investment returns, a survey has found.

SINGAPORE investors are an overly-optimistic lot, with the millennials here particularly more bullish and confident of their investment returns, a survey has found.

The average investor in the city-state expects a 9.2 per cent minimum return on their investments per year, according to the Schroders Global Investor Survey 2016. This is a stark contrast to the average stockmarket yield of only 3.8 per cent.

This over-optimism is more pronounced among millennials, who expect a 9.6 per cent return on their investment per year compared to 8.9 per cent for investors aged 36 and over.

"Singapore investors are overly optimistic about income returns," said Schroders on Wednesday.

Investors here also have a short-term investment view. While asset managers usually recommend a minimum of five years for investing, investors in Singapore stay invested for 3.06 years on average.

Millennials are even more short term-oriented. They hold their investments for an average of 2.61 years, compared to 3.47 years for their older counterparts.

Singapore investors appear to be very confident in their investment knowledge. More than half (55 per cent) describe themselves as having a higher-than-average understanding of investments. Millennials are even more self-confident, with 61 per cent of them agreeing to the statement, compared to 50 per cent by their older counterparts. Very few (11 per cent) of them feel they have less-than-average understanding.

"In today's low interest rate environment, Singapore investors' return projections are extremely high. In order to minimise income shortfall, investors need to actively consider their investment needs and align their risk-adjusted return profile in light of current market conditions," said Susan Soh, country head of Schroders Singapore.

The survey, commissioned by Schroders, was conducted online and sampled 20,000 end-investors in 28 countries around the world between March 20 and April 25. It defines "investors" as those who will be investing at least 10,000 euros (or equivalent) in the next 12 months and who have made changes to their investments within the last five years.

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