China’s young investors embrace risk. Why are their portfolios so safe?
Young Chinese investors may be just as willing to take risks as their global peers, but their portfolios remain more conservative against a backdrop of years of relative underperformance in China’s stock market, a prolonged property downturn and deflation, according to a senior researcher at the CFA Institute Research and Policy Centre. The disconnect between their willingness to take risks and…
Young Chinese investors exhibit a willingness to take risks similar to their global counterparts, yet their portfolios remain more conservative, according to a senior researcher at the CFA Institute Research and Policy Centre. The discrepancy between their risk appetite and actual investment choices highlights a significant "aspiration-implementation gap," explained Rhodri Preece, senior head of research at the institute.
Despite expressing a desire to retire early and be willing to take risks, most Chinese investors' portfolios consist of more conservative investments such as wealth-management products and money-market funds, Preece stated. The research surveyed 400 affluent investors in mainland China, focusing on 300 Gen Z and millennial respondents.
The findings revealed that 72% of Chinese investors held cash or cash equivalents, while 62% owned bank or trust wealth-management products. In contrast, cryptocurrencies and mutual funds were the most commonly owned investments globally among young investors, at 67% and 64%, respectively. The institute found no clear difference in risk attitudes between Chinese investors and their global peers.
Preece attributed the divergence in portfolios to factors such as differences in product availability and the market environment in which young Chinese investors have grown up. China's equity market has underperformed global benchmarks for several years, although it recovered strongly in 2025. The Shanghai Composite Index gained 18% last year, compared to a 21.6% return for the MSCI World Index.
The mainland benchmark fell 3.7% in 2023, after dropping 15.1% in 2022. The prolonged property downturn and deflation have also narrowed investment options and made cash and cash-like products relatively more attractive due to their real returns, according to Preece. Cryptocurrencies, while popular among young investors globally, are restricted in mainland China, providing an additional explanation for the different portfolio mix.
Written by urgent.news from SCMP Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
