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Aussie investors show domestic bias

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By Reporter
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2 minute read

Australian investors feel safe about buying assets at home, but at the expense of certain growth markets, according to the investment management firm Franklin Templeton.

In its Global Investor Sentiment Survey, the manager found an improvement in outlook in 2013, however investors are preferring to keep one's assets onshore.   

When asked where they see the best equity opportunities this year, 54 per cent of investors surveyed said they expect Australia to offer the best returns, while 30 per cent said that Asia would.

This sentiment continues going forward into the decade, with investors still expecting better home returns. 

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“The results show a clear bias for investors to keep their assets on home soil, which is understandable particularly given the attractiveness of the tax benefits associated with investing in Australian shares,” said Maria Wilton, managing director at Franklin Templeton Investments Australia.

This could mean that investors miss out on opportunities. 

Only six per cent of those surveyed said they would allocate “significantly more” to growth type investments, and only a small minority of respondents saw the best opportunities in emerging and frontier markets. 

“Investors may not be aware of the investment opportunities that exist globally across a range of sectors and may benefit from discussing with their financial adviser how these opportunities might complement their Australian exposure as global markets continue to stabilise,” Ms Wilton said.

Despite the improved sentiment, many investors are still taking a very conservative approach, which Franklin Templeton said has its own dangers. 

“Trying to avoid short-term risk and volatility entirely may expose investors to other kinds of risks, such as inflation and the impact of rising interest rates,” Wylie Tollette, director of performance analysis and investment risk for the firm, said. 

Franklin Templeton said despite these dangers, the company believes investors can traverse these waters if they educate themselves about their options. 

“These survey results underscore the importance of investor education, especially among investors who have not experienced as many market cycles and whose attitudes may be especially influenced by more recent market volatility,” Ms Wilton stated.

Aussie investors show domestic bias

Australian investors feel safe about buying assets at home, but at the expense of certain growth markets, according to the investment management firm Franklin Templeton.

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