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In addition, Expats who outperform invest in an average of 3.4 different markets, whereas those who underperform invest in an average of only 2.6. Those who outperform are twice as likely to have invested in three or more markets than those who underperform.
The findings come from the fourth biannual research study among expatriate investors by Internaxx, an online broker dedicated to expatriate investors in more than 110 countries and part of Banque Générale du Luxembourg/Fortis and TD Waterhouse.
However, confidence among expat investors that markets will grow has dropped by more than half in the last six months. Today, 25% hold that view, down from 53% in November 2004. Uncertainty has risen significantly - 54% are now 'undecided' on future market growth, up from 9% in November 2004.
Among those (21%) who think markets will not grow, stated reasons are mixed. Fears about oil prices and the US economy come first (1 in 4) followed by the poor EU economy (16%) and low consumer confidence (13%).
"Continental Europe is still practically in recession" says one investor. "We have a huge pending oil crisis and a massive US trade deficit, as well as trade disputes between China and the US" says another.
Among the 25% anticipating growth, reasons include positive sentiment about the Asian economy (one in four) with a similar number citing confidence in global economic prospects. As one investor says; "The Euro zone is weak and the UK faces problems, but China and India are forging ahead by the day".
Asian markets favoured
Among all investors Asian markets rank highest in order of favourability and more investors feel positive about China than about any other market.
In total, 55% of investors felt positive about Asian markets with the UK following behind at 37%. Investors are more polarised regarding European stocks (36% positive v. 38% negative) and the US clearly comes last with only 24% feeling positive towards the region compared to 46% claiming to be negative.
But positive sentiment towards a market does not always translate to action. Among those who are positive about China or Asia, only one in three actually invests in China, and just over one half invest in other Asian markets. Insecurity and lack of awareness typify investors' views of the Chinese and Asian markets with 50% of those not exposed to these markets claiming insufficient knowledge and one in five voicing concern over corporate governance or economic prospects.
Positive sentiment about Asia extends to lifestyle. Expat investors are happier to be in Singapore and Hong Kong that those based anywhere else (65% say they are 'very content' with their lifestyles there compared to 55% in continental Europe and only 43% in the UK). However, expats based in continental Europe are most likely to retire there (34%) compared to 10% among those in the Middle East, and only 5% in the UK.
Expat investors tend to understate their exposure to risk. While the vast majority hold blue chip shares, 45% balance their portfolios with highly volatile stocks. And with 47% invested in Asia, 27% invested in China and their most widely held asset class being shares (86%), investment patterns of expat investors tend to be more exposed to risk than they would care to admit.
The same imbalance holds true regarding their international exposure, with those claiming to have more of an international outlook than other investors dropping from 75% in November 2004 to 55% today, despite their highly international trading activity.
Internaxx
