In a bid to battle inflationary pressures, investors in Asia are betting on equities as the most preferred hedge against inflation followed by gold, says a survey.

According to investment bank Barclays Capital’s survey, equities are the most sought after hedge against inflationary pressures, while gold was the second most popular choice.

The survey covered clients of wealth management organisations with combined assets under management of over $ 5 trillion.

Equities continue to be the most recommended asset by wealth managers for the next six months to produce a global balanced-risk investor portfolio, it added.

This year investors are being advised to hold an average of 37 per cent of their portfolio in global equities a marginal decline from 42 per cent a year ago, the report said.

US equities are more favoured today, with an average allocation of 10 per cent, up from 5 per cent three years ago.

Moreover, 65 per cent of respondents said they are likely to raise this allocation over the next six months.

However, advisors are recommending a reduced allocation in equities in Latin America, West Asia, Eastern Europe and Africa compared to a year ago. The recommended asset allocation for these regions has fallen from an average of nine per cent to just five per cent, the report said.

A large majority of respondents expect revenues to grow by more than five per cent in Asia, excluding Japan, over the next two years, wherein the most attractive countries for business expansion in the region would be China and India.

“We now see risk appetite increasing as investors begin to feel more comfortable with the recovery of the global and regional economies,” Barclays Capital Head of Investor Solutions for Asia ex-Japan Peter Hu said.

Meanwhile, with global economies on a recouping mode, the percentage of respondents who felt the challenges of doing business across all categories were ‘extremely’ or ‘very difficult’ have reduced as compared with 2010.

Related Topics
comment COMMENT NOW