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Owning to the decent performance of the domestic stock market in FY18, equity emerged as one of the preferred asset classes among super rich investors.
On the other hand, the traditional bank deposits grew at much lesser single-digit rate during the previous financial year, according Karvy Private Wealth Report 2018.
The report added that individual wealth in direct equity zoomed 30.32 per cent to massive a Rs 48.97 crore in FY18, making the most preferred asset for holding individual wealth, overtaking fixed deposit and bonds which ended at Rs 42.09 lakh crore.
Insurance, however, maintained its third rank, holding Rs 33.36 lakh crore of individual wealth.
Abhijit Bhave, Chief Executive Officer, Karvy Private Wealth, said, “Direct equity has emerged as the preferred asset class in FY18.
The volatility in world markets and the Indian market has been noteworthy of late, but India still stands tall and has reclaimed ‘the world’s fastest growth large-developing economy’ tag from China.
We foresee that the coming five to seven years will be the time for equity as an asset class and investors can possibly treble their wealth in equities.”
In FY18, the individual wealth in India grew to Rs 392 lakh crore, a rise of 14.02 per cent on year-on-year basis, against a growth of 10.91 per cent in FY17.
Individual wealth in mutual fund grew by a whopping 34.50 per cent during the year.
“The HNIs or Ultra HNIs have also started moving assets towards alternative investment.
Total individual wealth in alternative asset stood at Rs 1.24 lakh crore in FY18,” the report showed.
It further added that the share of investment in financial assets is on the rise and has increased to 60.22 per cent YoY and the proportion of physical asset has come down to 39.78 per cent in FY18 from 48 per cent in FY17.
“We project that till FY23, the total individual wealth in India will have a healthy growth rate of a CAGR of around 14-19 per cent,” Karvy Private Wealth said in a report.
Investment in unlisted equity grew by 36.83 per cent in FY18.
“This has been one of the favourite asset classes amonst HNIs with higher risk appetite and for those who wish to leverage on the entrepreneurial spirit of India,” the report said.
