Investors in China hold a larger proportion of higher risk assets in their household portfolios (44 per cent compared with 32 per cent in Japan), according to the survey. The country is also the most bullish when it comes to investing in more risky penny stocks despite almost a third of Chinese investors flagging concern about market volatility.

In contrast, investors in Japan are notably bearish with their household balance sheets, allocating 41 per cent of assets to cash. Even when dealing with equities, three quarters, compared to 51 per cent in China, prefer to invest in more stable blue-chip stocks.

In other findings, Chinese investors were found to be more likely to make one-off investments in mutual funds - something that would offer short-term gains during market buoyancy. The Japanese were identified to be more disciplined, investing in mutual funds through regular installments. They are also less concerned about trying to market time their investments, an approach that's rarely successful, Manulife said.

“The recent stock market slide in China can be considered a cautionary tale for investors taking on too much risk,” said Ronald Chan, Manulife's chief investment officer, equities, Asia excluding Japan. 

“Many commentators were speculating that Chinese equities were in bubble territory by mid-March 2015. However, investors went on to accumulate an additional RMB1 trillion ($161 billion) in debt to finance short-term investments in richly valued stocks before the market peaked in mid-June and began to lose ground.”

Manulife Asset Management's executive vice president, Michael Dommermuth, added that the many Japanese investors that are playing it too safe may be sacrificing a larger retirement pot. Investors in both countries need to improve efficiencies in achieving a balanced risk portfolio to reach long-term financial goals, the group said.