By Grace Ng

WEALTHY Singaporeans are more likely to brave volatile stock markets and invest in riskier assets compared with investors in the West, a new survey has found.

But more people here also plan to raise their cash holdings as investors across the world turn defensive in the wake of the credit crunch.

The findings emerged from a poll of 2,300 affluent people from 15 countries conducted by Barclays Wealth and the Economist Intelligence Unit (EIU).

It showed that 39 per cent of Singaporean respondents are likely to raise the level of risk in their portfolios. This compared with 29 per cent in Britain, 36 per cent in the United States and 34 per cent in Hong Kong.

But high net worth Singaporeans are still not as willing to stomach risks like people in emerging markets such as China and India, where four in 10 are opportunistic in the current environment.

The survey, conducted in March and April, is the first global poll of investor behaviour that Barclays and EIU have undertaken since the credit crisis began last August.

They found differences in the cash holdings of investors in developed markets - where more than 46 per cent of respondents see cash as king - compared with those in emerging ones. In Singapore, 44 per cent of respondents are retreating into cash to weather market volatility compared with 42 per cent in India and 39 per cent in Hong Kong.

Older investors appear to be less nervous in the face of market volatility, with 41 per cent aged over 50 planning to keep more money in the bank while 51 per cent of younger investors see banks as their safe haven.

Surgeon T.P Wong, in his 50s, said he is holding about one quarter of his portfolio in cash and is looking to invest in more equities as he sees 'better valuations in certain sectors'.

There is 'clearly a temporary reduction in risk-taking due to less optimistic investment prospects', said Mr Didier von Daeniken, chief executive at Barclays Wealth Asia Pacific.

But increasing allocation to cash does not necessarily mean there will be a long-term change in people's willingness to bear risk, he noted.

Volatile markets have indeed made clients more risk-adverse, said Mr Pierre Baer, chief executive of SG Private Banking (Singapore and South Asia).

'In general, there is a significant increase of investors who are adopting a defensive strategy by allocating more of their portfolio to cash as compared to six months ago,' he said.

The bank advises clients to be 'cautious on equities, neutral on bonds and positive on alternative asset classes such as hedge funds'.

This article was first published in The Straits Times on September 3, 2008.