(Yicai Global) March 10 -- Just over 40 percent of individual investors in China said they would still buy stocks when the market fell in 2019, whereas institutional investors tend to redeem shares when facing risks and sharp declines, according to a recent survey by a government agency.

Some 63.7 percent of individual investors said they will continue to focus on fund investment that year despite the losses, a noticeable jump from 48.8 percent in 2018 and 38.9 percent in 2017, the Asset Management Association of China said yesterday, which canvassed the opinions of 50,000 individual investors and 63 institutional investors.

The findings are of particular pertinence at the moment as China’s stock markets tumble. Since the middle of February, the Shanghai Composite Index has lost 6.39 percent in value, the Shenzhen Component Index has plunged 13.15 percent and the ChiNext Index, which tracks growth enterprises listed in Shenzhen, has crashed 20.06 percent. Several well-known funds were down over 20 percent as of March 8.

Individual investors tend to focus on income and reputation, whereas institutional investors look at the comprehensive strength of fund managers and their product yields, the AMAC said in its 13th such report to date. Some 95 percent of institutional investors make judgments based on domestic macroeconomic expectations.

As a result, they are less likely to invest in public funds, it said. Out of the 63 surveyed, almost half had invested less than 5 percent of their capital in such funds. Most only hold a single public fund for between six months and two years.

Over half of the individual investors surveyed had an annual income of between CNY100,000 (USD15,350) and CNY500,000. Their main source of income was their salary. Most were educated to a bachelor’s degree or above.

A third of individual investors regarded ‘obtaining higher returns than bank deposits’ as their most important investment objective, the AMAC said. Nearly 80 percent used terminal devices such as mobile phones as their main trading methods.

Editor: Kim Taylor