Hong Kong investors are captivated by disruptive technological innovation, a survey from Alliance Global Investors (AllianzGI) found.
The study found 56% of respondents are interested in investing in biotechnology, 52% in healthcare technology, 46% in fintech and 45% in alternative energy.
When selecting thematic investments, more than half of investors believe fund performance is the key consideration, while 44% prefer exposure to megatrends with promising prospects.
“People tend to invest in thematic funds that are related to their personal experience or things that they are interested in,” said Paul Fu, director of Greater China retail distribution at AllianzGI Asia Pacific, in an interview with FSA.
“Although these trends are not new, people experienced changes within the technology sector over the past few years due to the Covid lockdown. That’s why we think higher awareness and consciousness among investors led to the popularity of the technology theme.”
This finding is reinforced by the survey as it found that 41% of investors want to invest in themes that resonate with them personally and to support the development of those themes through investment.
The study also found people with strong tech-related interests make them more likely to invest in digital living, healthcare technology and intelligent machines.
Meanwhile, people who are interested in playing online video games are more likely to invest in digital living and intelligent machines as well as smart cities.
Those who are strong advocates of environmental protection generally attach great importance to the corporate social responsibility stance of the investment management companies they choose and invest in environmental megatrends such as green energy and responsible water and land use, the survey found.
AllianzGI’s Thematic Investment Study interviewed 300 investors aged 25 or above who currently own fund investments in Hong Kong.
The survey also found that many Hong Kong investors believe thematic investment products can complement traditional fund products.
Around 64% of the respondents believe thematic investment products are more forward looking compared with traditional funds, while 63% think thematic funds can provide exposure to structural trends across sectors and regions.
“All traditional funds are based on the old economy, while thematic funds are looking at bigger growth prospect, so I think from an investment standpoint, it is natural for investors to believe there is higher growth potential for some evolving megatrends,” said Fu.
He concluded by saying that investors should try to invest in multi-themed funds instead of single-themed funds for diversification.
“When there is a new theme that is gaining popularity, naturally the valuation will skyrocket until people sell them off when it is too expensive. If you invest in a single-themed fund, you cannot switch to other themes to control the risk. A multi-themed fund, on the other hand, has the flexibility to increase allocation into other themes that are gaining traction,” said Fu.