These 3 factors will drive investment growth in 2022

ESG, millennials, and ageing savers emerged as the top factors.

Investment Management Association of Singapore (IMAS), based on its 2022 Investment Managers' Outlook Survey, found three factors that will drive investment growth in 2022.

These factors—selected by 56 c-level executives of fund management firms based in Singapore—are the following: further increase in the environmental, social, and governance (ESG) investments (75%), growth of millennials as investors (46%), and ageing savers increasing their allocation in investment products (38%).

Susan Soh, IMAS chairman, said the soaring demand in ESG-related investments has driven IMAS members to “developing business lines around sustainable finance or ESG products.”

Based on the survey, 59% of businesses are already integrating ESG into existing strategies.

“More than half of them are looking into new launches of ESG and impact strategies for 2022,” Soh added.

Whilst there will be drivers to growth, investment managers in Singapore also saw three threats to the investment management industry in 2022.

These threats were significant market correction across major asset classes (61%), shortage of required skills to support future industry growth (59%), and further margin erosion (55%).

Meanwhile, inflation is also a worry amongst investment managers with one in two (50%) believing that developed economies will succumb to high inflation.