High-net-worth (HNW) investors in Asia Pacific are looking for diverse investment outlets to ‘put their money to work’ and structured products are on the table, according to a new UBS survey.

Around two-thirds (63%) of HNW individuals and business owners in Asia surveyed by the Swiss bank would consider increasing holdings of structured solutions to enhance yield. This marks the first time UBS has garnered such a result in its quarterly survey.

It also comes against the backdrop of well-performing equity markets so far this year, the low interest rate environment as well as lingering risk from the trade war between the US and China, the bank added.

“We asked about yield enhancing type of structured products and this would be your transitional reverse convertible notes [RCNs] that provide investors with a coupon in which the upside is capped, but give the downside buffer with either a lower strike or a low kick-in or both,” said a UBS spokesperson.

Despite a third of the investors’ portfolios allocated in cash or equivalent, almost 70% of the respondents sought a diversified investment approach to manage ongoing risks, rather than selling out their positions.

Apart from structured products, investors also pointed out dividend stocks and high-yield bonds to boost yield and generate income. Roughly two-thirds of respondents said they would consider holding more of such assets. Investors also expressed interest in sustainable investing and other investment themes such as medical technology and smart mobility.

Investor appetite for diversification comes as concerns grow over not just the trade war but also the slowing global economic growth. More than 80% of the respondents feel ‘cautious about a potential decline of the markets,’ while 80% are worried about market volatility prompted by the trade conflict. Still, over half of the investors thought the tensions between the world’s two largest economies will be resolved.

Other issues of concern among the investors were local market’s long-term competitiveness and cyber security.

Meanwhile, overall business confidence in Apac edged up 4 percentage points to 77% in the second quarter, with more than a third of the business owners planning to increase hiring in the next 12 months, also up 5 percentage points from Q1.

Investor sentiment globally also improved as the ratio of those planning to raise their investments rose to 46% from 42% in the first three months of this year.

UBS surveyed around 1,700 HNW investors and business owners in nine Asian markets, such as China (including Hong Kong and Taiwan), Japan and Thailand, with at least US$1 million in investable assets or at least US$250,000 in annual revenue and at least one employee other than themselves, in case of business owners, during the period between June 3 and July 6 2019.

A total of 3,899 investors and business owners in 17 markets around the world participated in the global survey.