APAC investors reported having 32 per cent of their portfolios allocated in cash or cash equivalents. Among Hong Kong investors, cash allocation was lower at 29 per cent, with 35 per cent allocated in regional and international stocks.

Diversify rather than cash out
Two-thirds of Asian respondents said that they were taking a diversified approach to investing rather than selling out of their portfolios as a way to manage ongoing risks, with a majority interested in a range of opportunities. For APAC investors, sustainable investing led the focus, attracting interest from 59 per cent of investors, followed by 56 per cent on yield or income generation (which includes dividend stocks, high-yield bonds and structured solutions) and 54 per cent on thematic investments such as medtech and smart mobility.

The Swiss bank polled 3,900 HNWs with at least US$1 million in investable assets or at least $250k in annual revenue for business owners between June and July 2019. The global sample was split across 17 markets: Brazil, China, Germany, Hong Kong, Indonesia, Italy, Japan, Malaysia, Mexico, the Philippines, Singapore, Switzerland, Taiwan, Thailand, the UAE, the UK, and the US.

From three months ago, the study found that Asian investors were slightly more upbeat on the global economic picture for the next 12 months, but slightly less positive about their own regional outlook. Alhough just over half thought that the current market cycle had reached the mid point, weighing most on minds were a global trade conflict (47 per cent), local markets staying competitive longer term (43 per cent) and cyber-security risk (43 per cent). Globally, Latin American investors were the most optimistic in their economic outlook (76 per cent) and the most bullish on their region’s own stocks (77 per cent).

There was almost universal concern among recipients that US-China trade tensions could further depress the market, although more than half of investors in Asia-Pacific thought negotiations would result in a new trade deal.

Business confidence
Despite dips in economic confidence, business sentiment was slightly up in Asia from 73 per cent to 77 per cent for the quarter. About a third of business owners said that they plan to increase hiring in the next 12 months, broadly in line with the previous quarter. Respondents weighed taxes, cyber-security and competing with new technologies roughly equally as their top three business concerns.

Chief investment officer for UBS in the region, Min Lan Tan, said that the wealth manager's investment focus was on enhancing income, such as in high-yielding stocks, when interest rates were low and falling.

“The gap between regional dividend and bond yields is now close to the levels last seen in late 2015 when high-yield Asian stocks started to outperform. Furthermore, we emphasize global diversification, given central banks’ differing capacities to ease," she said.