A report on the habits of retail investors - of all levels of wealth - shows a more conservative approach to risk this year.

Investors of all wealth tiers in Asia – excluding Japan – have turned more conservative in how they allocate their assets from a year ago, a survey by analytics firm Cerulli Associates shows.

The share of respondents with an investment horizon of three years or under rose 48.4 per cent in 2016, from 39.1 per cent in 2015, the report, Asian Wealth Management 2016, says.

Generally, Asia ex-Japan investors have higher cash holdings so far in 2016 than they did last year. Except for in India, investors in Asian markets pared down their exposure to unit trusts, mutual funds, and exchange-traded funds.

Indian investors appeared to put more money in managed funds at the expense of investment properties. Hong Kong investors also reduced their exposure to investment properties, as prices have been falling steeply in recent years, in favour of directly-held bond investments.

Meanwhile, the shift from other asset classes into alternatives has been muted over the past year. China is the only country showing an uptick of more than one percentage point in holdings of the asset class between the 2015 and 2016 surveys.

However, alternative products in China are unlike those available in Singapore, for example. In China, alternatives tend to be in the form of structured products, whereas in Singapore, they are often more conventional liquid alternative funds. Allocations to alternatives in Singapore remained steady over the period, helped by their availability to investors at lower wealth tiers.

Funds of funds managed by foreign asset managers have become popular in Taiwan; they oversee seven of the top 10 funds of funds in terms of inflows for the year to July. This suggests Taiwanese investors want international exposure, the firm said.