Hong Kongers too optimistic on investment returns

They expect to make an average annual return of 9%.

Hong Kong investors expect to make an average annual return of 9% over the next five years, asset manager Schroders revealed.

According to its Global Investor Study, their expectation is lower compared to their counterparts in Asia, 11.7%, and the world, 10.2%.

"While somewhat below their global peers, their return expectations are still higher than historic market performances and are demanding in real terms," Schroders said.

The MSCI World index, which measures the performance of global stock markets, achieved annual returns of 7.2% between 1987 and 2017, with all income reinvested.

"Some emerging markets have experienced bouts of high-interest rates and elevated inflation, which eats into returns. This may have increased expectations for returns in some of those markets," the firm said.

Schroders believes that returns in the next few years could be modest. The Schroders Economics Group has forecast a 4.2% annual return for world equities over the next seven years, or 2.1% a year after inflation is taken into account.