Where should Vietnamese people invest to avoid inflation in 2023?

The above results are presented in the recently published Wealth Expectancy 2022 report by Standard Chartered Bank. The report examines changes in investment decisions among more than 15,000 middle-income, high-income, and high-net-worth individuals in 14 markets, including Vietnam...

Overall, 80% of domestic investors are proactively managing their assets and changing their investment strategies in response to current economic challenges. The main concerns include inflation (36%), the risk of economic recession (21%), and global economic volatility (18%).

This year, gold continues to be a popular investment channel for Vietnamese investors, with 57% of participants stating they invest in the precious metal due to inflation. Additionally, nearly half of investors are interested in value stocks and 44% are interested in bonds.

Beyond traditional channels, the survey also revealed that 73% of domestic investors still believe that digital assets constitute an important part of any investment portfolio, despite the market facing numerous challenges in 2022. Globally, 66% of investors hold digital assets, while in Vietnam this figure reaches 80%. With this number, Vietnam is among the countries with the highest participation of investors in this channel, along with Nigeria (90%), Thailand (80%), and Indonesia (80%).

Looking ahead, nearly three-quarters of survey participants indicated they would continue to increase their investments in digital assets in 2023. Of these, 41% believed it was a good way to diversify their portfolios, and 33% saw many people making significant returns from this channel. However, the Standard Chartered survey was conducted before the FTX exchange's bankruptcy, and events over the past few weeks may have affected this sentiment.

Trading at a stock exchange in District 1, Ho Chi Minh City. Photo:Quynh Tran

Speaking about the shift in investment in Vietnam, Harmander Mahal, Head of Retail Banking, Small and Medium Enterprises in Vietnam and the Group of 4 Asian Countries, Standard Chartered Bank, said that with the rapid development of the capital market, investors in Vietnam, especially those in the high-income segment, are increasingly knowledgeable, have more in-depth expertise, and demand stricter requirements for investments.

"Recent developments in the private bond sector, volatility in the capital markets, and rising inflation are contributing to accelerating the shift towards professionally managed investment services in Vietnam," he said.

Over the past year, surveyed Vietnamese investors have made financial changes. 26% made new decisions regarding their investment portfolios, while approximately 25% chose to cut spending. According to Standard Chartered, these are the main reasons for the shift in key asset classes.

Furthermore, to achieve investment returns higher than the inflation rate, 62% of investors are seeking to reduce their cash holdings, not significantly different from the global average of 61%. The bank forecasts that global cash allocations will decrease from 26% in 2022 to 15% this year.

Beyond cash, investors are also reconsidering holding stocks amid increased market volatility, although this remains an integral part of their portfolios. According to surveys, among those currently investing in stocks, the proportion of stock allocation in portfolios in Vietnam is projected to decrease from 10.9% to 7.5% in 2023.

Marc Van de Walle, Global Head of Asset Management at Standard Chartered Bank, shared: "It is crucial for investors to make decisions that align with both their own goals and the external environment. We believe that diversified portfolios with strategies aimed at generating income from multiple asset classes offer the best opportunities today."