Affluent Canadians invest and travel close to home

VANCOUVER, Dec. 13, 2011 /CNW/ - Canada's affluent concentrate nearly three quarters (74%) of their investments in Canada. And while 62% confirm they feel it's important to have a diversified portfolio which includes emerging markets, only 8% of investments are currently concentrated in those areas. Furthermore, over three quarters (78%) indicated that the United States was their most common travel destination, and also their second favourite investment market (55%).

These are the findings of a national study commissioned by HSBC Bank Canada on Travel and Investment trends, which spoke exclusively to Canadians with investable assets of $100,000 or more.

The survey reveals that a lack of familiarity may be one of the key hurdles to investing in emerging markets - with 71% of respondents indicating they need to feel well informed about a market before they invest there. While 67% of respondents are willing to invest anywhere they think there are opportunities, respondents are overlooking some of the world's fastest growing economies.

Margaret Willis, Executive Vice President, Head of Retail Banking and Wealth Management, HSBC Bank Canada, said: "The survey results demonstrate that emerging markets represent an untapped opportunity among this Canadian demographic. By 2050, we predict that the GDP of emerging economies will have increased five-fold, and that 19 of the world's top 30 economies will be found in emerging markets. When you look carefully, you see that some of the world's most attractive investments are found beyond our borders."

When reviewing the travel statistics of this same demographic, results show that both investments and time are being concentrated in North America. In particular:

• In the past three years, 73% of Canada's affluent have spent two months or less outside Canada, while only 1 /10 have spent four months or more abroad.
  
  
• The USA was the most common travel destination for Canada's affluent, with 78% confirming they've travelled there in the last three years.
  
  
• The USA is also their second favourite investment market. When affluent Canadians do invest outside Canada, more than half (55%) choose to do so in the United States, which was higher than any international alternative.
  
  
• When they do travel, their primary reasons are for pleasure (75%), to visit family (17%), and business (9%).
  
  
• Affluent Montrealers were the most traveled of all (averaging 2.4 months over three years outside of Canada), whereas affluent Vancouverites were the least (1.8 months over three years). Torontonians averaged 2 months over three years, while Albertans averaged 1.9.
  
  
• The most visited cities were London (15%), Paris (12%), New York (9%), Las Vegas (8%) and Rome (7%).

Given familiarity with a market has been highlighted as a key need for affluent Canadians prior to investment, it's not surprising that they're overlooking the less frequented emerging markets, which don't necessarily make their travel list. However, you don't need to travel to a destination in order to have the knowledge to invest in those markets.

"HSBC Bank Canada is able to tap directly into the HSBC Group's global network to enable individuals and families to invest with guidance and confidence in new markets. Of course, there are inherent risks when investing in emerging markets, so investors must carefully assess how to diversify their investment portfolio," Willis added.

For Canadians looking to diversify their portfolio and invest in new emerging markets, HSBC Global Asset Management (Canada) Limited, a subsidiary of HSBC Bank Canada, offers one of the largest suite of emerging market mutual funds in the country, including the HSBC Chinese Equity Fund, the HSBC Indian Equity Fund, the HSBC Emerging Market Fund, the HSBC BRIC Equity Fund, the HSBC Asia Pacific Fund and the recently added HSBC Emerging Markets Debt Fund.

Note to Editors:

About the survey
Conducted in October 2011, the HSBC-commissioned study on the travel and investments trends of Canada's affluent was conducted by Angus Reid Public Opinion among a representative sample of 1,031 Canadians with investable assets of $100,000 or more. The online survey was conducted with respondents based in Montreal, Toronto, Vancouver, Calgary, and Edmonton. The margin of error is +/- 3.1%. Discrepancies in or between totals are due to rounding.

About HSBC Global Asset Management
HSBC Global Asset Management manages assets totaling US$453 billion, and is a leader in emerging markets, with US$139 billion invested in this asset class globally. Through its network of offices in approximately 30 countries, HSBC Global Asset Management has a worldwide client base of private clients, intermediaries, corporates and institutions invested in both segregated accounts and pooled funds. (All figures as at 30 June 2011.) For more information see www.assetmanagement.hsbc.com.

HSBC Global Asset Management (Canada) Limited is the manager and primary investment advisor for the HSBC Mutual Funds. HSBC Investment Funds (Canada) Inc. is the principal distributor of the HSBC Mutual Funds. HSBC Mutual Funds are also distributed through authorized dealers. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing.  Mutual funds are not guaranteed or covered by the Canada Deposit Insurance Corporation, HSBC Bank Canada, or any other deposit insurer. Their values change frequently and past performance may not be repeated. The unit value of money market funds may not remain constant. Emerging Markets are subject to currency fluctuations, less liquid trading markets, greater price volatility, political and economic instability, less publicly available information, and changes in tax or currency laws or monetary policy. These risks are likely to be greater for emerging markets than in developed markets.

About HSBC Bank Canada
HSBC Bank Canada, a subsidiary of HSBC Holdings plc, is the leading international bank in Canada. With around 7,500 offices in over 80 countries and territories and assets of US$2,691 billion at 30 June 2011, the HSBC Group is one of the world's largest banking and financial services organizations.

For further information:

Media enquiries: 

Ernest Yee Vice President, Corporate Affairs HSBC Bank Canada [phone]

Fabrice de Dongo Senior Manager, Public Affairs HSBC Bank Canada [phone]