Asia Pacific Oriental Wealth Management Co., Ltd. Director and President
Qianhai International Capital Management Institute Family Office Tutor
Visiting Professor at Peking University and Tsinghua University
International Registered Financial Advisor (CFC)
Senior Securities Investment Analyst
Zhang Ling has worked in large financial institutions such as China Merchants Bank’s Head Office, Essence Securities, and Hong Kong Zhiyi Financial Group.
The power of finance lies not in short-term profits, but in compound interest over time. The guarantee of security comes from an asset allocation in which not all the eggs are put into one basket. When you are a wandering hero, your outlook and setup are important; investment is the same.
China has entered the era of “enterprises trying to go abroad” + “global asset allocation”. According to the Hurun Wealth Report, by 2020 the number of households with more than six million yuan of investable assets will reach 3.46 million in China, and investable financial assets will account for half of China’s overall personal wealth.
According to statistics, more than 70% of respondents have taken the first step and begun to embrace global asset allocation:
- More than 70% of high-net-worth individuals have overseas plans, using this as investment activity in order to make full use of the market and resource allocation brought about by globalization, and enjoying global dividends while based in China.
- 7% of high-net-worth individuals rely on professional wealth management agencies or professional information issued by these institutions when planning and investing overseas.
The Value and Significance of Global Asset Allocation
Global asset allocation can reduce capital risk to the utmost extent, and preserve and increase the value of assets. It has the advantages of contributing to family wealth inheritance, asset portfolios, overseas education for clients’ children, financial planning, tax planning, and asset protection. With the fluctuation of the RMB exchange rate, it is necessary to decentralize the holding of some offshore assets and non-RMB assets in order to avoid the systemic risks caused by the excessive localization of assets and the decline of a single currency. Therefore, in recent years, medium to high-net-worth individuals have been actively engaged in different forms of overseas asset allocation.
In view of the strong demand from medium to high-net-worth customers, we have been exploring and perfecting global asset allocation for a long time. Through a unique multifaceted perspective, we have established an “onshore + offshore” integrated investment service system, using globally diversified investment platforms and tools to help customers realize the one-stop allocation of global assets. We provide a number of high-net-worth clients with comprehensive solutions for wealth planning, and financial services to help them achieve their medium and long-term core strategic wealth goals.
The Solutions We Can Provide For You
- Offshore Trusts and Foundations
Trusts and foundations are the preferred framework for the isolation, preservation and inheritance of family wealth around the world. They have been widely used by high-net-worth individuals at home and abroad. They are mainly intended for tax planning or deferral, asset security isolation, flexible wealth inheritance, strict confidentiality of information, and so on. Many wealthy families at home and abroad such as Li Ka-shing have used this as their main tool for wealth inheritance.
- Overseas Insurance
Compared with mainland insurance, overseas insurance has the following significant advantages: high compensation ratio, broad insurance coverage, efficiently-settled payments, wide-ranging geographical area, high dividend returns, a focus on privacy and confidentiality, convenient reinsurance, and so on.
- Equity Fund of Leading Enterprises in the Industry
Under the ever-changing market conditions, industry leaders reflect the momentum of the new economy and new technologies. The excellent “Head Wolf” equity project has huge potential for profit. At the same time, we focus on the best time for investors to find equity investments, avoid early equity investments, and reduce the risk of getting caught up in a failing business. Furthermore, we do not participate in pre-IPO rounds of investment to avoid the risk of overvaluation and the uncertainty of overvalued returns. Instead, we lock the equity investment within a certain scope of stable returns, bringing stable growth and appreciation of wealth to customers.
- Global Real Estate
Real estate investment has become both Chinese people’s faith and a strong need. In the era of soaring housing prices, many Chinese investors have used real estate investment tools to rapidly grow their wealth and become a “wealth class” with tens of millions – or even billions – of assets. In the recent years of RMB exchange rate volatility, high domestic housing prices, and confusing housing scenes, quite a number of prophetic and discerning investors have opened up global horizons and followed the country’s “One Belt, One Road” move towards making overseas investments across global territories, to look for real estate investment slumps and adjust their wealth structure through global asset allocation. According to the “2018 Hurun China Investment Immigration White Paper”, the investment types which domestic high-net-worth individuals have currently chosen the most are foreign exchange deposits and real estate. The proportion of real estate investment will grow steadily to 44% from 30% in the next three years. More than half of high-net-worth individuals are willing to invest between three million and six million yuan in overseas property.
What kind of financial investments are used for investing overseas?
Purpose rising or falling trend the next 3 years
Foreign exchange deposit
Standard financial products
Investment in Arts
Opening an overseas company
Venture capital / equity investment VC/PE
As the largest financial, economic and trade center in the Middle East, Dubai was ranked the best real estate investment place in the world in 2017 by international authorities!
Dubai – An Investment Paradise for High-Net-Worth Individuals, and a Modern International Metropolis Suitable for Living and Doing Business
Three returns when investing in Dubai properties:
01 Rental Yield
- Dubai is currently one of the cities with the highest rental yield in the world. According to statistics, the average rate of return on real estate investments in Dubai last year reached 8-10%, and the annual rate of return on rents in popular locations is as high as 10% or more. Therefore, the investment recovery period is also very short. Basically the cost can be recovered in about 11 years.
- As the world’s fourth largest tourist city, Dubai has the best of all kinds of things in the world. It is full of human imagination and enthusiasm. In between blue sea and sky and golden desert, people’s love for it grows wildly, and it attracts nearly 20 million tourists every year. The demand for housing rentals is huge.
02 Appreciation of Real Estate
- Dubai is a cosmopolitan city located at the intersection of Europe, Asia and Africa. It ranks among the world’s top financial centers and is the fifth largest shipping center in the world. Its housing price-to-income ratio is the third highest in the world. Compared with Singapore, Hong Kong, Shanghai, London, New York, and others, Dubai’s average house price is only 25,000 yuan per square meter, which is a low valuation, and the space for appreciation is considerable.
- With the approach of the 2020 World Expo, Dubai’s housing prices are gradually rising. In addition, the UAE is the core country of China's “One Belt, One Road”. The Dubai Investment and Development Agency has established close commercial relations with China, and more and more high-net-worth people from China are pouring into the city. The momentum of economic growth is quite strong.
- Dubai is currently in the market of forward delivery housing. After the completion of the forward delivery housing, the total price of the property will increase by at least 20-30%.
03 Appreciation of Dollar Assets
- Dubai’s currency is the Dirham, which has a fixed exchange rate with the US dollar. 1 US$ equals 3.67 Dirham, which has hardly changed for decades. Buying a Dubai property is equivalent to holding a dollar asset, which can hedge the risk of RMB depreciation and is one of the best means of maintaining and increasing the value of assets.
- Comfortable Living Environment
01 Friendly and Inclusive Atmosphere
Dubai is a hot spot full of dreams and passions. Its culture of openness is ranked second in the world, and the number of immigrants accounts for over 90% of the population. At the same time, as a center for the Middle East and North Africa, Dubai is very attractive to the outside population. The population is in a state of high growth. On average, 761 people come to work and live in Dubai every day. The average annual population growth rate of 6.5% is among the highest in the world. Furthermore, the population is very young. A total of 79% of the population are 20-49 years old. Dubai has more than 200 ethnic groups, similar to other immigrant cities in the United States, and Hong Kong and Shenzhen. The population’s mentality is positive and open, the atmosphere is friendly and relaxed, and the culture is diverse and inclusive. It is really a city full of innovation and vigor!
02 The Second Safest Large City in the World
Dubai’s laws are sound, and it has been rated by Interpol as one of the safest cities in the world and ranked second within the world’s safe cities. Furthermore, as Dubai applies artificial intelligence technology to its security field, its security will be further enhanced.
03 International Education Heights
Education has always been regarded as one of the life-bloods of the Dubai government. Dubai has a diversified education system with more than 200 international schools. The top 100 universities in the world such as New York University in the United States, the University of Birmingham in the United Kingdom, and the University of Wollongong in Australia have set up branches here. Furthermore, the cost of studying abroad is much lower than that of international schools in the UK, the US and China. If you want to go back to a domestic school, you can also take a dual entrance exam for overseas Chinese students. The admission scores for overseas Chinese candidates at the top universities in China have been greatly reduced.
- Good Business Environment
01 Very Low Taxes
Thanks to a stable social economy, companies registered in Dubai enjoy a VAT rate of 5%, the lowest in the world. There are no other taxes, and some industries have no taxes at all.
02 Trade and Economic Center
As a trade center and cargo distribution center for Europe, Asia and Africa, Dubai is an important trade and transportation hub and a necessary location for shipping. The world-class infrastructure breathes vitality into the city’s economy and there is enormous room for development. More than 4,200 Chinese companies are currently operating in Dubai.
03 Transport Hub
As the world’s aviation hub, international passenger traffic ranks first in the world. A four-hour-long flight reaches more than one third of the world’s population (with the exception of North America), and an eight hour flight reaches the remaining two thirds. At the same time, according to the rankings of the Baltic Shipping Exchange and the Xinhua News Agency International Shipping Center Development Index, Dubai has become one of the top five aviation hubs in the world.
In summary, just as one influential report stated, Dubai is the “world’s best real estate investment destination in 2017”! The report was issued by Cluttons, a world-renowned real estate consulting company, which was founded in London in 1765 and has a history of 253 years. It operates in more than 100 countries around the world, and is also a professional organization engaged in asset valuation and property consulting.
The greatest value of asset allocation is to let us control wealth and, after diversifying and hedging risks, let us have an appointment with the future! Who said “Of wine, won’t you drink one last cup with me? West beyond Yang Pass, no old friends you’ll see?!” Go to Dubai and have a look, and enjoy the “splendid scene of glorious setting sun over the edge of the desert” together with the ambitious, passionate and dreamy chiefs!