Inflation Geopolitical Risks Force Investors To Shift Strategies Says Study

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Schroders’s study surveyed over 23,000 people who invest from 33 locations globally, including Malaysia, Indonesia, Singapore, and Thailand.PETALING JAYA: 57% of Malaysian investors have been forced to re-evaluate their strategies in response to ongoing inflation and geopolitical uncertainties, said British asset management firm Schroders.
According to its Global Investor Study 2023 released today, a large number of respondents believe that a new era of policy and market behaviour has begun as a result of higher inflation and interest rates.
“This is in stark contrast to last year’s study when some respondents believed the market challenges to be a blip and predicted a quick return to the more benign, low-inflation, low-rate environment,” the study said.
“As a result 57% of Malaysian investors have already adjusted their investment strategies, and a third intend to do so,” it added.
Schroders’s flagship study surveyed over 23,000 people who invest from 33 locations globally, including Malaysia, Indonesia, Singapore, and Thailand.
The study also showed that Malaysian investors who rated their investment knowledge as “expert” were the quickest to react with 89% of them having already adapted their strategy.
On the contrary, 47% of respondents who rated their investment knowledge as “beginner” have not yet adjusted their approach.
Despite increasing concerns over the global economy, 92% of Malaysian investors expect returns to be either identical or higher compared to last year, compared to 87% globally and 90% in Southeast Asia.
“This was particularly the case amongst ‘expert’ investors in Malaysia, with only 2% (versus 4% globally and 3% in SEA) expecting next year’s returns to be lower,” the study said.
“Strikingly, the majority of Malaysian investors expect annual returns of 12.4%, higher than the global average of 11.5%. This is also higher than the 9.46% annualised return of the MSCI World Index of global stocks between 1987 and September 2023,” it added.
Group chief investment officer Johanna Kyrklund said the results of the study show that some investors are adjusting quicker compared to other investors.
“In an investment landscape being increasingly shaped by the ‘3Ds’ of deglobalisation, decarbonisation and demographics, investors are still getting used to the fact that higher inflation and higher interest rates are here to stay.
“Compared to the last 15 years, you may now need to be more flexible and active in the way you invest,” she said. - FMT

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