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Where did India’s ultra rich invest in 2019? Here’s how they will use and grow wealth this year

FE Online

Equity investments remained the most attractive asset-class for India's ultra-high-net-worth-individuals (UHNWI) in 2019, according to Attitudes Survey, part of Knight Frank’s Wealth Report 2020. This was despite global headwinds and domestic fluctuations caused by the NDA government's first full budget post re-election, economic slowdown, RBI's aggressive easing of monetary policy and rising inflation. Indian UHNWIs did not follow their Asian peers who prefered to invest in real estate ahead of equities.

"In 2019, for Indian UHNWIs, equities remained the most preferred asset class in the portfolio with 29 per cent allocation, followed by 21 per cent  allocation for bonds and 20 per cent into property investments," the report said. According to the data provided in the report, Asian UHNWIs preferred property investments with 28 per cent asset allocation, investing 21 per cent in equities and 19 per cent in bonds. 3 per cent growth was recorded in private equity as an investment class, year-on-year, from 4 per cent in 2018 to 7 per cent in 2019.

"Despite uncertainty in 2020 around 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.

The report that is part of Knight Frank's Wealth Report 2020, states that 24 per cent UHNWIs in Asia Pacific are looking to invest in commercial property domestically and just 17 per cent are eyeing to allocate capital to cross-border purchases in the coming year. While 26 per cent UHNWIs in India are looking to invest in properties domestically and 15 percent have eyes set on foreign investments. Around 21 per cent Indian UHNWIs invested in bonds, followed by 20 per cent of them investing in properties. Gold and precious metals saw 7 per cent UHNWIs put in their money.

UHNWIs in India do not see the current market conditions put a brake on their wealth creation. A remarkable 73 per cent of them expect an increase in their wealth creation. On the other hand only 55 per cent of their global counterparts expect their wealth to increase. 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 coming year.