Cash Holdings by Asia's Rich Rise to Five-Year High, Survey Says

Despite shift to cash, Asia’s rich remained heavily invested in equities

Singapore (Bloomberg) – Rich Asians boosted their cash holdings to the highest level in five years as they sought to buffer their wealth against any downturn in buoyant financial markets, according to a survey by Capgemini SA.

High-net-worth individuals, or those with at least $1 million in investable assets, were also moving into cash to provide ammunition to re-enter the market at lower levels in the event of a correction, the Capgemini survey of wealthy people in the Asia-Pacific region excluding Japan said. Cash holdings rose to about 25 percent of financial assets in the second quarter, from 21 percent in the 2016 survey.

Despite the shift to cash, Asia’s rich remained heavily invested in equities, with the proportion also rising to a five-year high of 28 percent, the survey said. The rise in equities and cash holdings came at the expense of investments in alternative assets such as structured products, hedge funds and property.

The Asia-Pacific region, including Japan, saw slower growth in the number of millionaires and in total wealth in 2016, when compared with the previous year, Capgemini said. Total wealth rose 8.2 percent to $18.8 trillion, with Indonesia and Thailand recording the fastest expansion, compared with 9.9 percent growth the previous year.

By Chanyaporn Chanjaroen and Krystal Chia