After 2014 disappointments, cash is king for Singapore investors: Manulife survey

Of the 500 investors surveyed between November and December last year, one-quarter say they will "invest" in cash more than in any other asset in the next six months. -- PHOTO: ST FILE
Of the 500 investors surveyed between November and December last year, one-quarter say they will "invest" in cash more than in any other asset in the next six months. -- PHOTO: ST FILE

SINGAPORE - After the roller-coaster ride financial markets went on towards the end of 2014, a big chunk of Singapore investors are planning to play it safe this year and keep their money in cash, according to an online poll by financial service firm Manulife released on Friday.

Of the 500 investors surveyed between November and December last year, one-quarter said they will "invest" in cash more than in any other asset in the next six months - making cash the most popular option of the 8 types of investments in the survey.

Coming in second, with 21 per cent, was stocks and shares.

-- GRAPHIC: MANULIFE

This was despite the biggest group of those surveyed expecting that stocks will be the top-performing asset class in the next six months, with cash coming in second, but by a wide margin.

"With interest rates likely to remain low in 2015, cash deposits will not give investors the returns they hope for," warned Mr Naveed Irshad, president and chief executive of Manulife Singapore, which authored the survey.

But Singapore investors seem to fear that volatility, which has been the flavour of the month, may bring them larger downsides than gains.

"Cash may be perceived as a safe-haven amid the recent resurgence of equity market volatility," noted Ms Jill Smith, senior managing director of Manulife Asset Management Singapore.

Almost nine out of 10 investors here said they hold cash as an investment and that the proportion of cash in their portfolios has climbed steadily in recent quarters, now averaging 36 per cent of their total asset allocation, excluding their homes. ok.

Cash holdings of investors here - equivalent to 46 months of income - are also significantly higher than the Asia-wide average of 24 months.

-- GRAPHIC: MANULIFE

Saving more was also the top financial goal of 2015 for Singapore investors, found the survey. Investors here are already saving 17 per cent of their income on average.

Singapore investors' counterintuitive financial thinking also extended to investing in property, the survey found. They said it was not a good time to invest in property because prices are too high and a price correction is expected in 2015. However buying a property for investment remains third on their list of top performing assets and third on their list of assets to invest more in this year.

marilee@sph.com.sg