The conflict in the Middle East has clearly led to heightened market volatility in recent weeks, driving uncertainty around energy prices, inflation and global growth.

However, new research from Fidelity International shows “more matured investors in Apac are staying focused on long-term outcomes, whereas many investors tend to temporarily stop investing”.

The findings are part of “Fidelity International’s Be Invested Study”, which surveyed over 13,000 retail investors across Asia Pacific and Europe.

According to the research, 20% of Apac investors say market fluctuations do not affect their investment behaviour, as they remain committed to their long-term strategy despite short-term movements. This is particularly the case for investors aged 55 or above (24%), underlining the relative resilience of older investors.

At the same time, a higher proportion of investors are taking a more cautious approach: 25% indicated that they temporarily stop investing during periods of volatility, especially investors in Hong Kong (35%), Taiwan (28%) and Japan (26%). A further 17% of Apac investors seek advice before making changes, especially in Australia (22%), mainland China (21%) and Singapore (20%). Meanwhile, 8% report selling some of their investments in affected sectors right away.

Yet, some Apac investors are “leaning into volatility as an opportunity”, with 15% actively looking for buying opportunities in sectors or regions affected by market movements, and 15% allocating capital to other sectors that they consider unaffected by the volatility. This is even more pronounced for investors in Singapore, with 18% and 20% respectively utilising volatility to allocate more capital.

Charlotte Chan, head of HK global platform solutions & head of Hong Kong, at Fidelity International commented: “Market volatility is a natural part of investing, but it can challenge even the most experienced investors. It is encouraging to see that a significant number of investors in Apac are maintaining a long-term perspective and staying invested, allowing for the potential for stock market drops to be later followed by new highs.”

Diversification is key

The research also shows a continued preference for domestic investments, with Apac investors allocating a significant share of their portfolios to their home market (61%), higher than the average for global investors (56%) and European investors (52%).

While this reflects familiarity and confidence in local markets, it also underscores a potential gap in geographic diversification to manage risk and capture broader opportunities, according to Fidelity.

Looking ahead, technology and AI stand out as the most favoured sector among Apac investors in all markets, with 61% expecting it to deliver strong returns over the next 12 months.

This places it ahead of energy (36%) and healthcare (28%), reinforcing AI’s position as a key structural growth theme. While much has been written about AI-related investments entering ‘bubble’ territory, less than half (45%) of Apac investors expect a significant correction in the AI sector in the next 12 months. On the contrary, a higher proportion of Apac investors (51%) expect to increase their investment in AI, with the strongest interest seen in Taiwan (62%) and mainland China (62%).

Chan said: “AI is an exciting long-term opportunity for investors, and it’s clear many recognise its potential to drive future growth. At the same time, it’s important not to get carried away by short-term momentum.”

Finally, Chan advises that investors should stay invested, diversify across regions and sectors, and take a long-term view rather than try to time the market.