Where should Vietnamese invest to avoid inflation in 2023?

The above results are stated in the Wealth Expectancy 2022 report recently released by Standard Chartered Bank. The report studies changes in investment decisions of more than 15,000 people in the middle-income, high-income and high-net-worth segments in 14 markets, including Vietnam...

Overall, 80% of domestic investors are actively managing their assets and changing their investment strategies in the face of current economic challenges. Among them, inflation (36%), the risk of economic recession (21%) and fluctuations in the world economy (18%) are the main concerns.

This year, gold continues to be a channel of interest to many Vietnamese investors, with 57% of participants saying they invested in the precious metal due to inflation. In addition, nearly half of investors are interested in value stocks and 44% are interested in bonds.

In addition to traditional channels, the survey also showed that 73% of domestic investors still believe that digital assets make up an important part of any investment portfolio, despite the many problems this market faces in 2022. Globally, 66% of investors hold digital assets, while in Vietnam the rate is up to 80%. With this figure, Vietnam is among the countries with the most investors participating in this channel, along with Nigeria (90%), Thailand (80%) and Indonesia (80%).

Looking ahead, nearly three-quarters of survey respondents said they would continue to increase their investments in digital assets in 2023. Of these, 41% said it was a good way to diversify their portfolios, and 33% saw many investors making significant profits from it. However, the Standard Chartered survey was conducted before the FTX exchange went bankrupt, 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

Talking about the shift in investment in Vietnam, Mr. Harmander Mahal, Director of Retail Banking, Small and Medium Enterprises in Vietnam and 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 in-depth knowledge and have stricter requirements for investments.

“Recent developments in the private bond sector, volatility in capital markets and rising inflation are all contributing to the acceleration of the shift to professionally managed investment services in Vietnam,” he said.

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

In addition, to achieve investment results higher than the inflation rate, 62% of investors seek to reduce cash holdings, not far from the global average of 61%. The bank forecasts that global cash allocations will fall from 26% in 2022 to 15% this year.

In addition to cash, investors are also reconsidering their holdings of stocks in the face of increased market volatility, although they remain an integral part of their portfolios. According to the survey, among those currently investing in stocks, the proportion of stocks allocated to their portfolios in Vietnam will decrease from 10.9% to 7.5% in 2023.

Mr. Marc Van de Walle - Global Head of Wealth Management, Standard Chartered Bank shared: "It is important for investors to make decisions that are appropriate for both their own goals and the external environment. We believe that a diversified investment portfolio with strategies to generate income from many types of assets offers the best opportunities today".