India’s ultra-rich prefer equity, bonds to real estate


Mumbai: India’s wealthy individuals have a preference for equity and bonds, as they place their bets on prospects of better economic growth in Asia’s third-largest economy. On the other hand, their Asian counterparts prefer real estate, cash and gold, global property consultancy firm Knight Frank said in a wealth report on Wednesday.

For 2018, Indian wealth managers gave a thumbs up to equities, and allocated 30 per cent to this asset class, 28 per cent to bonds, as their clients preferred these high return investment avenues.

Real Estate with 23 per cent allocation was the third-most invested asset class by Indian ultra-high net worth individuals (UHNWIs).

Interestingly, liquidity was not the preferred asset which made up only 9 per cent of the total investments of Indian ultra–rich.

“While globally UHNWIs are showing affinity towards more liquid investments as it is the most risk averse asset, Indian counterparts on the other hand are increasing their exposure in the equity and bonds,” said Shishir Baijal, chairman & managing director, Knight Frank India.

“There is a sense of confidence amongst Indian UHNWIs on the strength of the countries economic growth which is pushing them to invest in higher risk assets for shorter periods of time, Baijal said.

Private Equity which saw only about 4 per cent of wealth allocation in 2018 is set to see a significant rise in 2019 to 37 per cent a survey said, while allocation to equities is seen rising to 34 percent. Bucking the global trend, Indian UHNWIs showed least preference for the most liquid of all assets, i.e. cash, which is likely to decline by 15 percent in 2019, as per survey respondents.