Aussie market optimism outpaces APAC peers: Fidelity

Fidelity International research has revealed Australian investors are significantly more optimistic about the market outlook than their APAC peers, despite ongoing volatility.

The firm’s Asia Pacific Investor Study, surveying more than 6,500 APAC investors, found seven in 10 (69 per cent) of Australians are optimistic or very optimistic about the outlook for the stockmarket in the next 12 months.

Comparatively, only half of Chinese investors indicated as such, and the outlook was even worse in Singapore (43 per cent), Taiwan (25 per cent) and Hong Kong (24 per cent), with Japan (22 per cent) being the least optimistic.
Highlighting this positive outlook, Fidelity found that more than half (54 per cent) of Australian investors are expecting returns of 10 per cent or higher from their long-term investments.

In fact, a third of Australians (33 per cent) are planning to invest more and just shy of half (46 per cent) intend to retain their current investment plan over the next 12 months, despite ongoing economic uncertainty.

Even as many across the region continue to struggle with the cost-of-living crisis, Australian investors are also reportedly more comfortable with their financial situation than others in the area, with 70 per cent saying they are comfortable or very comfortable.

However, they are being more vigilant this year, with 61 per cent of Australian investors saying they are checking their investment portfolio more frequently, a trend that can also be seen across the wider APAC region (47 per cent).

While much of the volatility seen this year has been centred around the US, there is a noticeable split on how APAC investors have responded to these actions and changed their US allocations.

For example, almost a quarter (23 per cent) of APAC investors holding US equities have decreased their allocation since the start of the year. However, an equal amount (23 per cent) have also taken the opportunity to increase exposure to these assets, making Australians the most likely in the region to have done so.

On the other hand, around a third of Hong Kong and Taiwan investors have decreased their allocation to US equities, 37 per cent and 30 per cent, respectively.

While acknowledging the “roller-coaster” market activity over the last six months, Fidelity Australia managing director, Simon Glazier, suggested Australians have managed to remain positive and are setting themselves up to make the best of shifting markets.

“On the whole, they are feeling positive about the outlook, both for their own portfolios and for the broader market, and are positioning themselves to take advantage of opportunities that may arise,” Glazier said.

“Supporting their confidence may be the fact that superannuation funds have returned strong performance for the last financial year which highlights the importance of tuning out short-term market noise and focusing on long-term strategies.”

As markets have evolved, Glazier said investors have shifted their focus away from traditional solutions and are taking advantage of emerging opportunities to improve portfolio diversification while still keeping their focus on long-term strategies.

“It’s encouraging to see more APAC investors choosing to increase their investments rather than reduce them during this period of market volatility. While daily fluctuations can feel unsettling, volatility is a natural and inevitable part of investing. 

“During market corrections, it may even create attractive opportunities, setting the ground for boosting long-term rewards, especially for equity investors with a long-time horizon.

“Staying invested in a well-diversified portfolio remains the best strategy to navigate different market cycles. Building a global portfolio can help manage risk and support better investment returns, especially during volatile times.”