Investor sentiment and asset allocation strategies have wavered during the year for those with HK$1 million to spend, according to Bruno Lee, HSBC's regional head of wealth management, personal financial services, Asia-Pacific.
'Sentiment has changed dramatically when we compare the first half of this year to the second half,' Lee says.
'While the investment opportunity in emerging markets is more attractive, there is caution that the overall market may still be volatile. We are seeing an obvious shift from bonds to equity.'
At Deutsche Bank private wealth management, Christian Nolting, lead strategist, Asia-Pacific and regional head of portfolio management, global investment solutions, says: 'A portfolio that we could recommend and that we could customise to the client's risk profile would see a mix of sovereign and credit in the fixed income space, equities, hedge funds, gold, Asian currencies, real estate infrastructure funds and cash.'
Nolting's asset allocation would split as follows: 8 per cent in fixed income sovereign; 23 per cent in fixed income credit; developed market equities at 16 per cent and emerging market equities at 17 per cent; 14 per cent into exchange traded funds; 10 per cent into commodities; 5 per cent in real estate infrastructure funds; and 7 per cent in cash.
'In the fixed income space, we reduced the allocation towards government bonds a lot,' he says. 'But there is more room in fixed income credit where spreads could come down a little so we would allocate more there than in fixed income sovereign.
'For equities, this is the first time we like emerging markets more than developed. I would usually allocate about 5 per cent into private equity for an investor with more than HK$1 million but, without this option, I would split the 5 per cent equally between developed and emerging market equities.