The majority of Thai stock investors have been forced to reconsider their strategies because of inflation and geopolitical uncertainties, although they still expect higher returns this year than last, according to a recent global survey.
Schroders Global Investor Study 2023, which polled more than 23,000 investors in 33 locations, including Indonesia, Malaysia, Singapore and Thailand, found that 70% of Thai investors changed their investment strategies, while the remainder intend to do so.
The vast majority of Thai investors remain optimistic, with 90% expecting returns to be either identical to or higher than in 2023, according to the study, which was released on Jan 2.
The majority of Thai investors expect annual returns of 13.5%, higher than the global average of 11.5%. This is also higher than the 9.46% annualised return of the MSCI World Index of global stocks between 1987 and September 2023, noted the study.
"Almost 90% of Thai investors believe we have entered a new era of policy and market behaviour as a result of higher inflation and interest rates," said the London-based investment management firm.
This is in stark contrast to last year's study when some respondents believed the market challenges were a blip and predicted a quick return to the more benign, low inflation, low interest rate environment.
"In an investment landscape increasingly shaped by deglobalisation, decarbonisation and demographics, investors are still getting used to the fact that higher inflation and higher interest rates are here to stay," said Johanna Kyrklund, chief investment officer and co-head of investment for Schroders Group.
"Every asset has had to reprice to compete with the yield on cash in the bank. Comparing the last 15 years, you now need to be more flexible and active in the way you invest. The study showed some investors are adjusting quicker than others."
More than half of Thai investors are attracted to investing sustainably, aligning with societal principles and the potential to generate positive environmental impact.
Some 49% of Thai respondents said sustainable funds are likely to offer higher returns, according to Schroders.
Regulators and asset managers in recent years have been working to democratise private assets. However, 66% of Thai investors still have limited knowledge of the asset class, indicating greater education is required to support the continued growth of these investments, noted the survey.
"Thai respondents view private assets as a way to boost portfolio performance and an important diversification tool. Interestingly, 55% of them are also attracted by the perceived sustainability credentials of private assets," said the investment firm.
When evaluating private asset investment opportunities, Thais look at the potential for high returns (71%), liquidity (60%) and transparency (58%).
"It's a challenging time to be interpreting markets, and investors are looking for every available tool to achieve their desired outcomes," said Nils Rode, Schroders Capital's chief investment officer.
"We believe the widening of options for smaller investors is a positive development. We also believe the case for including a private asset allocation, where appropriate, is arguably stronger than ever."
Thai investors are most attracted to investing in private equity, followed by infrastructure, renewable energy and real estate, noted the study.
Private assets represent an incredibly varied set of opportunities and a huge number of return drivers, said Mr Rode.