PGIM: Asian Gatekeepers Split on Adding or Cutting Risk
Market uncertainty is leading to increasing divergence on whether or not to add risk in investment portfolios. Amongst Asian fund selectors, there was an exact 50/50 split, according to a PGIM study.
Gatekeepers at large global financial institutions in Asia (minimum of $1 billion in assets under management) were divided on the market outlook, with 37 percent looking to add risk and 37 percent looking to reduce risk in the next 12 months, according to PGIM’s Gatekeeper Pulse study. 27 percent see no change.
Still, Asia is the most optimistic compared to regional peers. In the US, 40 percent plan to decrease risk, compared to 32 percent who said they would add risk. In Europe (including the UK), there was even more pessimism, with 41 percent and 30 percent expecting to cut and add risk, respectively.
Most Optimistic on Donald Trump
On the White House, Asia was also the most optimistic with 27 percent believing the Donald Trump administration will be a boon for markets globally, compared to 21 percent in the US and 19 percent in Europe.
However, the consensus tailwind for boosting markets at over two-thirds in all regions was the resolution to recent geopolitical conflicts in Ukraine and the Middle East.
Investment Focus
In terms of focus on investments, 65 percent and 61 percent of Asian gatekeepers plan to increase allocation to government bonds and investment grade credit, respectively. Within equities, technology was still a prominent theme, with Asia leading all regions in prioritizing artificial intelligence (73 percent). In private markets, Asia had the strongest preference for direct and co-investments (69 percent).
The study was based on responses from 210 gatekeepers in 14 countries, including 60 in Asia (30 in Hong Kong and 30 in Singapore). In total, they oversee $31 trillion in client assets.
