Want your investments to earn HKD 35,000 more every year? Of course you do!

14 June, 2016

A balanced portfolio of assets is the holy grail of investments. Chart 1 shows how household assets in Hong Kong are currently allocated, exclusive of property. Equities in Hong Kong and China have had a bad year, down 23% and 8% respectively. Mutual Funds (in HK, Mutual Funds are primarily equity funds) have also not met expectations. In a previous blog, we’ve already shown that there’s HKD 2 trillion of lazy money in bank accounts earning investors a negative real return of -2.8%! The “Other” category includes FX and commodities, both of which have had a volatile year. Savvy investors need to look beyond the traditional investment vehicles and explore alternative investments if they are to truly diversity their returns and earn suitable returns.

Chart 1: HK Household Asset Class Ownership


Source: JP Morgan Research

Lending on Monexo’s P2P platform is an alternative investment avenue where lenders are encouraged to diversify their portfolio by choosing to lend to borrowers with diverse risk profiles, while earning returns ranging from 7% to 25%. The average Monexo lender has earned 12.5% over the last year, making it a very attractive investment!

The way investors can add Monexo to their asset mix is by reducing the percentage of their portfolio in cash (from 46% to 41%) and equities (from 30% to 25%) isviagraotc and reallocating those funds to alternative investments (See Chart 2). In a previous post, we’ve shown how and why investors should switch from underperforming bank stocks to the underlying loan assets itself (read here). We can also remove investments in FX and Commodities which provide very low or negative returns and reallocate those to Monexo too. Thus, the entire “Other” category comprising of 26% of the entire portfolio could be lent on Monexo.

Chart 2: Re-allocated HK Household Asset Class Ownership


To see the effect of this change in asset mix, let’s assume that the total household asset is HKD 1 million. In the original case (without Monexo), the return on the portfolio with the allocation, as per Chart 1, would be -3.09% for the last year. With the new allocation, as per Chart 2, the portfolio finally earns a positive return of 0.42%. That simply translates to a HKD 35,100 more than what the investor could have previously received.

It only takes HKD 100,000 to start lending and earning on Monexo! Hong Kongers, what are you waiting for? Make your money grow!