Investors from China are increasingly scouting for opportunities in overseas markets due to the wild swings in the domestic capital markets and currency weakness, said an industry report published on Aug 17.
The report, jointly published by Manulife-Teda Fund Management Co Ltd and Manulife-Sinochem Life Insurance Co Ltd and based on responses from 216 investors across China, said that investors are particularly interested in real estate, mutual funds and fixed-income products.
The overall investment sentiment remained bullish during the second quarter of the year and 67.5 percent of the investors on average said they believed it was the right time to make investments and had a positive outlook, the report said.
Demand for wealth management products rose during the period, the report said, with about 60 percent of the respondents keen on professional wealth management services. Of this, nearly 41 percent preferred Internet platforms, rather than face-to-face consultancy services, the report said.
US-dollar-denominated bonds were among the most popular items for Chinese investors who often purchase such products through the Qualified Domestic Institutional Investor program, according to the report.
Products with annual yields of about 4 percent were appealing to Chinese investors who wanted to diversify investment risks by putting money into products in various locations and at different risk exposure levels.
“China’s investors may need more knowledge and understanding about investing overseas through mutual funds. In the latest poll we found that 27 percent of the respondents said they have been making overseas investments through mutual funds, a number that is higher than before but yet to achieve a relatively high level,” said Xu Kelei, product development expert and assistant to CEO of Manulife-Teda Fund Management.
Xu said the bottlenecks for China’s investors to increase the value of overseas investments are lack of knowledge and understanding of the assets and lack of channels to make such investments. It is a signal that companies should make available more such products to Chinese investors, said Xu.
Wealth management professionals said they have been observing an increasing demand for diversification of investments, as market conditions changed quite rapidly in the first half of this year.
Sun Bo, a wealth manger with Bank of Shanghai, said: “In the first quarter it seemed that stocks and stock-backed funds were dominant among investors. In the second quarter, especially in late June, investors were more keen on other options like bonds, real estate, gold bars and even insurance.”