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Equity, Bonds Remain Preferred Investment Assets For India's Ultra-Wealthy, Says Knight Frank

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Equity, Bonds Remain Preferred Investment Assets For India's Ultra-Wealthy, Says Knight Frank
Aparajita Gupta - 05 March 2020

New Delhi, March 5: Despite global headwinds, equity investments remained the most attractive asset class for Indian Ultra-High-Net-Worth Individuals (UHNWIs), according to Attitudes Survey, part of Knight Frank’s Wealth Report 2020.

The report said around 83 per cent of UHNWIs in India are planning to increase or maintain their allocations in equity, followed by 77 per cent in bonds, ahead of 51 per cent in property.

In 2019, for India's UHNWIs, equity remained the most preferred asset class in the portfolio with 29 per cent allocation, followed by 21 per cent allocation in bonds and 20 per cent into property investments. On the contrary, Asia's UHNWIs preferred property investments with 28 per cent asset allocation, followed by 21 per cent in equity, which is closely followed by 19 per cent allocation in bonds.

While 24 per cent of Asia Pacific’s UHNWIs are looking to invest in commercial property domestically, 17 per cent are allocating capital to cross-border purchases in the coming year. Comparatively, 26 per cent of India's UHNWIs are looking to invest in properties within the country while 15 per cent have plans to invest abroad.

“Private equity as an investment class saw an upsurge in the allocation from 4 per cent in 2018 to 7 per cent in 2019. Nearly 85 per cent of Indian UHNWIs are expected to increase or maintain their asset allocation in private equity investments,” the report stated.

“Despite uncertainty in 2020 over the impact of COVID-19, interest for assets remains high with significant capital chasing limited stock. While some private investors may delay their decisions due to the current climate, we expect secure assets that offer quality income streams to be in increasing demand,” said Neil Brookes, Head of Capital Markets, Asia Pacific, Knight Frank.

About 94 per cent of the money managers in India are expected to actively alter their clients’ investment strategies to protect their wealth in 2020.

Shishir Baijal, Chairman & Managing Director, Knight Frank India, said, “Despite the underlying economic challenges, Indian UHNWIs are optimistic about their wealth creation prospects. A remarkable 73 per cent of them expect an increase in their wealth compared to 55 per cent of their global counterparts.”

Knight Frank’s Wealth Report 2020 reveals that respondents in India ranked global economic slowdown, followed by trade wars, other political tensions and poor governance/ corruption as the main concerns that are affecting UNHWIs ability to create or preserve their wealth in the year ahead.

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