The portfolios of Australian investors have been hit harder by COVID than many of their global peers, but most believe that things are looking up.
A PIMCO survey found that 60 per cent of Australian respondents had seen a negative impact on their portfolios as a result of COVID-19, compared to 51 per cent across the five other APAC markets surveyed – Hong Kong, Singapore, Taiwan, and Japan.
“Despite this, many more Australians expect growth in their portfolios in the coming 12 months than foresee a contraction. And more Australians expect national and regional economic growth than their counterparts in the other APAC markets surveyed,” PIMCO said.
Those with lower incomes ($1,800 a week) were the worst affected by COVID-19, with 19 per cent of the group saying the pandemic had a “major” negative impact on their portfolios compared with 10 per cent of those with incomes above that level. Some 45 per cent of Australian respondents said the pandemic had also reduced their confidence in their own decision-making – but that hasn’t stopped them from backing themselves.
“In terms of who they trust to inform their investment decisions, most Australian investors put faith in their own experience and investment history: 59 per cent says this always or often contributes to their investment decisions, compared with an APAC average of 48 per cent,” PIMCO said.
Aussie investors also put trust in professionals, with 58 per cent incorporating professional financial advice into their decisions compared with an APAC average of 36 per cent.
“PIMCO has been a strong advocate for the benefit of advice and we were pleased but not surprised to see the level of trust that Australian investors have in their financial adviser,” said Adrian Stewart, PIMCO head of client management APAC ex-Japan.
“Relying on the expertise of investment specialists can be a helpful way of combatting cognitive and emotional biases when investing.”