Hong Kong investors most eager in Asia to beat markets – but temper return hopes: report

A recent survey conducted by Natixis Investment Managers reveals that Hong Kong investors are the most ambitious stock pickers in Asia, yet their return expectations are significantly lower than those of their regional counterparts. Ninety-five percent of the 750 individual investors surveyed, who possess at least US$100,000 in investible assets, expressed a desire to outperform the market, which is the highest proportion in Asia, with the average standing at 85 percent.

Hong Kong investors anticipate long-term returns of 12.3 percent above inflation, in contrast to the regional average of 17.3 percent, a discrepancy likely due to the recent AI-driven rally that inflated expectations. Financial advisers projected a more conservative long-term return of 8.8 percent, indicating a gap of only 16 percent, compared to 84 percent in Singapore and 110 percent in South Korea.

Natixis' Dave Goodsell attributes the more tempered expectations to the strength of Hong Kong's local equity market and an improving real estate landscape, which have helped temper enthusiasm for the AI supercycle. Despite the Hang Seng Index's impressive 28 percent gain in 2025, it has dropped over 8 percent this year, while South Korean and Taiwanese benchmarks have repeatedly hit record highs driven by soaring global demand for AI chips.

Hong Kong's economic fundamentals have shown signs of stabilization, with the city raising HK$388 billion (US$49.4 billion) in IPOs during the first nine months of the year and residential property prices rising about 7 percent through August. The top concern among Hong Kong investors is a potential market downturn, followed by inflation and interest rates.

US long-term bond yields hit their highest level since 2002 this month, which Financial Secretary Paul Chan Mo-po attributed to dampened sentiment in the Hong Kong stock market. Natixis remains optimistic on risk assets, raising its allocation to US equities to the maximum allowed within its model portfolios due to the start of the third-quarter earnings season and continued support from AI.

However, a recency bias in return expectations appears at odds with investors' risk tolerance, as 73 percent of respondents across Asia describe themselves as conservative or moderate investors, while 76 percent prefer safety over performance. Goodsell notes that investors have a tendency to extrapolate, believing that if the market is rising, it will continue to do so.