Another survey has found a mismatch between investors' risk appetites and their expected returns.

According to the findings, investors here expect their investments in local stocks to yield 17.9 per cent on average during the second half of the year, even though about a third of those polled also said they are unwilling to take a loss of over 3 per cent on the capital invested.

The survey was commissioned by Eastspring Investments, which is the Asian asset-management arm of Prudential.

In contrast, Hong Kong mutual fund investors who were surveyed expect a yield of 20 per cent on average from Hong Kong equities over the same period. In return, they are willing to take on, average, a 10.1 per cent loss on capital.

The survey polled 397 Singapore investors in July and August, including 235 with money in mutual funds.

It found that 55 per cent of those aged between 45 and 55 are actively preparing for retirement - whereas a good 45 per cent are not, despite being just years away from retiring.

And even though Singapore men believe they will need a higher retirement income than women, they are putting away proportionally less of their monthly income, the survey showed.

About 56 per cent of investors said that they hope to maintain half of their current monthly disposable income during retirement - they plan to fund this mainly through personal savings and Central Provident Fund money.

"Although many are aware of the need to prepare for retirement, only a small number are 'fully prepared' to do so, citing a lack of understanding of investment opportunities as a key reason," said Eastspring Investments global strategist Robert Rountree.

"We believe there is a need for investor education regarding retirement preparedness."

Mr Vinod Nair, chief executive of personal finance portal MoneySmart, agreed that better investor education was important. He said: "Many older people are very risk-averse. If they don't understand it, they won't buy it. They prefer fixed-income deposits and savings accounts as these are no-brainers."

He suggested starting with exchange-traded funds, which he called the "best compromise" between risk and return.

More investors here are also withdrawing from growth funds and reallocating that capital into income mutual funds, the survey found.

"I think it's normal herd mentality, coming in response to increased volatility during the first half of the year," said Mr Alfred Chia, chief executive of financial advisory firm SingCapital.

He feels this trend could prevail, noting: "I think there will be more volatility ahead, because of uncertainties regarding factors such as the pace of reform in China."