Investors in Asia Pacific are expected to add more sustainable assets and funds to their investment portfolios over the next five years. However, there are likely to be changes in terms of both allocation drivers and the way sustainability themes are accessed.
These are the main findings from research conducted by JP Morgan Asset Management (JPMAM).
Its Future Focus Survey canvassed a range of investment advisers based in Apac and found that while equities are currently the dominant asset within investors’ ESG portfolios, there are increasing allocations to alternative and multi-asset funds.
The survey also found that client demand is no longer the main driver for asset allocation decisions with greater diversification and the search for long-term value both cited by 41% of respondents as drivers.
In terms of regional trends, the survey showed a “seismic shift” towards China, with 40% of respondents stating that they would allocate to Chinese companies within five years for their sustainable investing.
“The sustainable investing market is going through a transformative period,” said Tomomi Shimada, lead Apac sustainable investing strategist at JPMAM. “Especially in China, interest in the decarbonisation agenda is increasing after COP26 and the government’s carbon neutrality commitment.”
The survey also revealed that Apac investors share the same frustrations as their global counterparts when it comes to ESG data, with almost half (47%) of survey respondents stating that end-investors were unsure about where to source the best information while 51% state that investors are confused about which metrics to factor into investment decisions.
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