Malaysians May Have To Rethink Their Investment Strategy In 2024

Schroders, a British multinational asset management company, has recently released a new report that paints a concerning picture of the Malaysian investment scene.

The Schroders Global Investor Study 2023, which has surveyed over 23,000 people who invest from 33 locations globally. The study identified that almost 78% of Malaysian investors now believe that we have entered a new era of policy and market behaviour as a result of higher inflation and interest rates. This also reflects regional and global sentiment as 78% of investors globally and 79% of investors in SEA believe the same.

This is a massive shift in sentiment compared to last year, where many investors believed that the poor state of the investment scene would be a small blip in the grand scheme of things. 

57% of Malaysian investors have adjusted their strategies

The belief was there would be a quick return to the low inflation, low rates environment but this is no longer true. According to the study, up to 57% of Malaysian investors have already adjusted their investment strategies. Another one third intend to do so.

The study also found that both Malaysian and global investors who deem themselves as having “expert” knowledge were the quickest to react to the changing circumstances. Up to 89% of these “expert” Malaysian investors had already adjusted their strategy accordingly. However, only 47% of “beginner” Malaysian investors have done so.

It was also found that 50% of Malaysian investors are increasingly seeing actively managed investment and mutual funds more attractive. This was followed by private assets (46%) and cryptocurrencies (44%).

Despite the grim outlook, up to 92% of Malaysian investors expect returns to be either identical to or higher than last year. Interestingly enough, the majority of Malaysian investors expected annual returns of 12.40%, higher than the global average of 11.5%.

Malaysians find the high cost of private equity investments a challenge

With regards to private asset investment, the study revealed that many Malaysians still have limited knowledge of the asset class. This may indicate that greater education is required to support the continued growth of these investments.

According to the study, up to 65% of investors in Malaysia highlighted that costs and expenses associated with private assets are acting as a barrier to investment.

On the other hand, Malaysian investors are more keen on investing sustainably, mainly to align with their societal principles and the potential for the market to generate positive environmental impact.

It was also noted that up to 43% of investors in Malaysia also said that sustainable funds are likely to offer higher returns.

A key element of sustainable investing is active ownership – engaging with companies directly to improve business outcomes with the ultimate aim of supporting investment returns. It was found that up to 90% of Malaysian investors are in favour of the concept of active ownership.

Read More: Guide To Knowing Your Investment Costs And Charges