Nearly three-quarters of Hong Kongers refuse to compromise beliefs for higher returns, according to new research commissioned by Schroders – a distinct deviation away from its traditionally pragmatic investor culture.
73 percent of Hong Kong investors refuse to compromise their personal beliefs even if returns were proven to be higher, according to Schroders’ «Global Investor Study 2020».
Moreover, Hong Kongers are increasingly realizing the potential to invest through this approach without sacrificing returns with 40 percent of respondents, in fact, attracted to sustainable investing due to expectations of higher returns.
Schroders commissioned Raconteur to conduct an independent online study of 23,450 individuals from 32 locations – including 500 in Hong Kong – between April and June this year.
Overconfidence or Expertise?
Interestingly, 37 percent of Hong Kong investors who rate their investment knowledge as «expert» or «advanced» are more likely to sacrifice beliefs for superior returns.
This suggests either greater overconfidence against sustainable investing or that the literature is unappealing to real professionals, which would contradict industrywide trends visible throughout the institutional investor community. In comparison, «beginner/rudimentary» (20 percent) and «intermediate» (25 percent) investors said they were less likely to sacrifice beliefs for gains.
«Communication is key if investors are to understand what sustainable investing really means and what this looks like in their portfolios, and this is a core focus for us,» said Hannah Simons, head of sustainability strategy at Schroders.
Walking the Walk
One notable act where investors pumped capital into markets with little to no regard for performance was during the rally in August after the arrest of pro-democracy media tycoon and Next Media founder Jimmy Lai alongside several of his colleagues.
In an unprecedented showing of solidarity, Hong Kongers rushed to buy Next Media stocks even as Lai publicly told investors that prices were unreasonably overvalued and to stop taking supporting the rally. Investors also poured funds into other listed media firms that had openly expressed pro-democracy sentiments through various approaches.
«The results of this year’s survey are clear – returns are not the only influence of investment decisions,» said Simons added. «People want their values reflected in the way they invest. People are increasingly looking to contribute to a more sustainable society through their investments.»
