In a low-yield environment, many Asia-Pacific investors are more actively monitoring their portfolios and willing to increase turnover and shift asset allocations in search of higher returns. However, they proceed cautiously with shorter time horizons due to fears of increased market volatility. Equities, new products, and diversifying across markets are seen as potential sources of returns and ways to mitigate risks. The survey also found that regulations are driving some investors to reallocate assets and take a more active approach to portfolio management, despite increased risk.

1. Sponsored by:Sources: The Economist Intelligence Unit survey, July 2017
Copyright: © The Economist Intelligence Unit, 2017
Investment and regulatory climate causing asset reallocation
InAsia-Pacific, low-yields andregulationsdrivenewassetallocations
In today's low-yield and regulated environment, many Asia-Pacific investors are more actively
monitoring their portfolios with a willingness to increase turnover and shift asset class allocations
for higher returns. However, they tread cautiously and with shortening time horizons on fears
that market volatility will increase. Equities, new products, and diversification across markets are
seen as sources of future alpha and factors to help mitigate risks.
% respondents
Investors looking to other asset classes
% respondents
Investors shifting portfolio strategies
Cash
Funds
Alternatives
Commodities
Bonds and
Fixed income
Equities
9%
19%
34%
39%
41%
50%taking a more active
approach to investing
reallocated asset classes due
to regulations
increasing portfolio turnover
despite increased riskiness
45
CHANGES ON THE
INSTITUTIONAL
INVESTMENT HORIZON

2. CHANGES ON THE
INVESTMENT HORIZON
Sponsored by:Sources: The Economist Intelligence Unit survey, July 2017
Copyright: © The Economist Intelligence Unit, 2017
Investment time horizons under pressure
New products and markets hold alpha promise
New
products
New
markets
Regulations
arbitrage
opportunities
New
technology
and tools
Increased
focus on
factors
Where Asia-Pacific investors see alpha in the next 3-5 years
80% expect to increase their
Environmental, Social and Governance
(ESG) investments over the next five years
% respondents, top five responses
plan to increase
exposure to
developing
markets in Asia.
56%
48%
38%
36%
34%
23%
% respondents, top five responses
What is the biggest impediment to lengthening the investment horizon?
Financial stability risk is
the number one concern
of institutional investors
in Asia-Pacific
Market
volatility
Reputational
risk
Short-term
requirements
Global
economic outlook
Regulatory
change
35%
29%
27% 27%
23%
of Asia-Pacific investors are
shortening their holding periods