26% of Vietnam investors make portfolio changes due to inflation: Standard Chartered

In 2022, 26% of Vietnamese investors made new decisions for their portfolios while 25% spent less on their investment decisions because of inflation pressure, according to a new Standard Chartered report.

The global bank’s Wealth Expectancy Report 2022 examined the shifts in investor decisions for more than 15,000 emerging affluent, affluent, and high net worth (HNW) investors in 14 markets including Vietnam, along with the resulting movements in major asset classes.

Survey results show that 80% of Vietnamese investors were more actively managing their wealth and making changes to their investment strategies, given current economic challenges, Standard Chartered said Wednesday.

Vietnamese investors cited inflation (36%), a threat of recession (21%), and an uncertain global economy (18%) as their top concerns, according to the report. Internationally, rising inflation (34%), a recession (27%), and an uncertain global economy (22%) were the main worries for investors.

To outpace inflation, 61% of global investors were looking to reduce their cash holdings, compared to 62% in Vietnam. Standard Chartered predicts that global cash allocations will fall from 26% in 2022 to 15% in 2023, as indicated by investor responses.

Investors are reconsidering their holdings of equities as market volatility increases, although this asset class will remain an integral part of portfolios, according to the report. Of those currently invested in equities, there is an indication that the allocation of equities in Vietnamese portfolios would fall from 10.9% to 7.5% in 2023 based on survey responses.

Gold continued to be of high interest for Vietnamese investors in 2022, with 57% saying they have invested as a result of inflation, the report shows. The proportions with interest in valued stocks and bonds were 49% and 44%, respectively.

Sustainable investments will continue to receive investor interest and capital, even though greenwashing concerns persist. More than half of global investors (52%) expect to increase their sustainable investments in 2023, while 54% of investors in Vietnam would do so.

Harmander Mahal, head of consumer, private & business banking, Vietnam and Asia Cluster Markets, Standard Chartered, said: “With the rapid development of the capital markets, investors in Vietnam are getting a lot more sophisticated, and their investment needs getting more demanding, especially amongst the fast-growing affluent segment.”

Mahal added, “The recent developments in the private corporate bonds space, together with the current volatility in the capital market and rising inflation, is fast-tracking the shift to professionally managed investments in Vietnam.”

The research was conducted in 14 markets, namely mainland China, India, Pakistan, the United Arab Emirates, Vietnam, Hong Kong, Kenya, Nigeria, Indonesia, Taiwan, Malaysia, Thailand, Singapore, and South Korea.