Citi China: Investors backing safer assets amid economic slowdown
Global Business
[]
03:10

Amid global uncertainties and economic slowdown, Chinese investors are actively seeking out safer and more diversified investment channels, according to Darren Buckley, Citi China's executive vice president.

China's wealth management market for high-net-worth individuals is growing rapidly. At the end of 2018, the number of high-net-worth individuals with investable assets of more than 10 million yuan (about 1.4 million U.S. dollars) reached 1.97 million. That was an increase of nearly 25 percent compared to 2016, and the number of this group is expected to reach 2.2 million by the end of 2019.

Buckley introduced that the number of wealth management clients of Citi China increased 26 percent last year, adding that the company aspires for continuous double-digit growth for its wealth management client base over the next few years. "Hopefully 30 plus percent," he said.

Meanwhile, Buckley stated that the company's wealth management business offers more than 200 kinds of products for clients with different risk preferences. Its top 10 equity funds had a 20 to 30 percent annual return in the first half of 2019.

Citi's logo is seen on top of a skyscraper in Shanghai. /VCG Photo

Citi's logo is seen on top of a skyscraper in Shanghai. /VCG Photo

Based on his observation, AI and tech stocks are popular. "But I do see also there's a tendency to move a little bit more towards fixed-income as there's uncertainty in the equity markets," he added.

He noted that the company is willing to offer more onshore and offshore opportunities for Chinese clients. "Our clients want to continue to invest with a balance of international investments that we can provide," Buckley told CGTN.

He forecast more opportunities for growth of investment products onshore.

"The regulation that focuses on building local asset management companies will create new investment opportunities onshore," he noted, further explaining that asset management becomes increasingly significant as wealth grows in China.

Buckley said that Chinese investors now are looking for safer products. "They are looking at risk… and then they are looking at the longer term investment opportunities and how to build wealth over time as opposed to trying to get a quick gain," he said.

It's not an exception. In light of the current economic landscape and monetary cycle across the globe, Buckley acknowledged that in the short term, investors have been affected by some uncertainties such as inconstant tariffs, and are a little more "conservative" when making investment decisions.

"Obviously some events around tariffs cause uncertainty in the market. So in the short term, I think we're seeing people being a little bit more conservative," he noted, adding that over the longer term, clients' appetite might see little change.

Globally, the U.S. market is still the preference among clients. "Outside of China market, we see a preference for the U.S. market, and maybe that's also a U.S. heritage that draws people to us to think about that. But we've also got a selection of investment opportunities across Asia and Europe," he elaborated.