THE majority of ultra wealthy people believe sustainability is a trend that is here to stay, but they have doubts on whether sustainable investing will generate superior returns, a survey by Lombard Odier has found.
The survey of 150 ultra high net worth individuals (UHNWI) in seven Asian countries including Japan and Singapore was conducted from July to October this year.
While 89 per cent of respondents believed in the sustainability trend, they also sought to understand the exact definition of sustainability and how to take it into consideration when investing.
Sixty-one per cent already take environment, social and governance (ESG) and sustainability into account in investment decisions. But 56 per cent said they have not actively increased the sustainability factors in their portfolios. They are still unsure or do not plan to do so, as they are sceptical that sustainability would generate superior returns.
Seventy-eight per cent of respondents believe low interest rates would be part of the new norm after the pandemic, and could stay low for decades. With such low rates, traditional asset allocation between bonds and equities may be challenged.
UHNWIs say their need for advice has increased, and hence discretionary mandates may be favoured. Fifty-eight per cent of respondents said they are likely to choose discretionary mandates, and another 44 per cent said they would opt for a mixture of discretionary and advisory mandates.
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