Examine the asset allocation pattern amongst Vietnam investors, western economy and Chinese Economy.

Risk and Return Analysis

Vietnamese investors follow a pattern of asset allocation that has traditionally been geared towards the local economy. Most of their investment goes into stocks, real estate and bonds. The majority of Vietnamese investors invest in real estate, stocks and bonds. They do also hold foreign currencies or gold but this is a small portion. In recent years however, Vietnamese investors diversify their portfolios by adding assets from other countries.

Western countries such as Australia, Canada, Europe and the United States tend to have a much more varied asset allocation than Vietnamese investors. The portfolios are usually made up of stocks, bond and other financial instruments like mutual funds or exchange traded funds (ETFs) along with alternatives investments like commodities and hedge funds. Real estate is often included as well although it may be less prevalent than other types of investments depending on the individual’s risk tolerance level.

In recent years, Chinese investors are diversifying more their portfolios by adding assets outside China due to concerns about the Chinese economy slowing significantly since 2008/09’s global financial crisis. They now invest in a variety of asset classes, including stocks from domestic and foreign markets, government bonds and real estate. Some Chinese investors are also investing in venture funds, which give them access to deals that were previously unavailable due to the strict regulations surrounding foreign direct investments within China.