Standard Chartered released its Wealth Expectancy Report 2022, which examines the shifts in investor decisions for more than 15,000 emerging affluent, affluent, and high net worth (HNW) investors in 14 markets — including India — along with the resulting movements in major asset classes. The survey results show that 66 percent of local investors are more actively managing their wealth and making changes to their investment strategies, given current economic challenges. Here are the other findings of the report:
Outpacing inflation
Indian investors cited inflation (23 percent), an uncertain global economy (18 percent) and the threat of recession (16 percent) as their top concerns. Rising inflation (34 percent), a recession (27 percent) and an uncertain global economy (22 percent) are key worries for investors internationally too.
In the past year, local investors have made changes to their finances, such as spending less (28 percent) and making new decisions around their portfolios (26 percent), which will prompt shifts in major asset classes.
To outpace inflation, 61 percent of global investors are looking to reduce their cash holdings, compared to 70 percent in India. Standard Chartered predicts that global cash allocations will fall from 26 percent in 2022 to 15 percent in 2023, as indicated by investor responses.
Investors are reconsidering their holdings of equities as market volatility increases, although this asset class will remain an integral part of portfolios. Of those currently invested in equities, there is an indication that the allocation of equities in Indian portfolios to fall from 10.8 percent to 7.6 percent in the next year based on survey responses.
This year, gold continues to be of high interest for Indian investors, with 61 percent saying they have invested as a result of inflation, in addition to combat inflation in 2022 there is, interest in value stocks at 60 percent and bonds at 59 percent.
Sustainable investments will continue to receive investor interest and capital, even though greenwashing concerns persist. More than half of global investors (52 percent) expect to increase their sustainable investments in 2023. 64 percent of investors in India will also do so.
Digital assets continue to interest investors
The research reveals that 81 percent of local investors still believe that digital assets are an important part of any investment portfolio, despite multiple setbacks in the market this year.
Currently, 66 percent of global investors hold digital assets, compared to 74 percent in India. Looking ahead, 81 percent of local investors surveyed plan to increase their investments in digital assets in the coming year. This is in part because many said they have seen people make significant returns off digital assets (36 percent), and 33 percent consider them to be a good way to diversify their portfolios.
However, it is important to note this survey was conducted before the FTX crash and the events of the past few weeks may dampen this sentiment.
Helping investors make better decisions
While most global investors polled (62 percent) were primarily managing their own finances, with some variation across markets. Many investors in India (42 percent) use professional wealth managers. On average, across the 14 markets, younger (18-35) investors (63 percent) are more likely to use a professional compared with 39 percent in the 55+ bracket. On average, investors taking advantage of professional advice were more likely to have diversified portfolios and higher holdings in sustainable investments.
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