The Mckinsey report had said that the wealth in the emerging markets have grown 3 times more than the rates of assets in developed nations. Now here's a report that is specific about India. Indian wealth management has given a return of 18% against the global 9.7%.

The wealth management arm of the KARVY Group released the 2nd edition of its India Wealth Report today.

This Report studies patterns of individual investments across financial asset classes (excluding physical assets like gold and real estate) and finds that India's individual wealth is expected to nearly triple from the existing 86.5 lac crore to 249 lac crore by FY16. In fact, the wealth of India's HNIs has grown by over 18% compared to a mere 9.7% for global HNIs in the last one year.

Interestingly, the Report shows that fixed deposits & bonds has become the top contributor to overall wealth held by individuals in India, displacing last year's topper, direct equity, primarily due to the uncertainty in the financial markets.

The report gives an overall perspective of individual wealth of Indians and the expected pattern of future investments. The Report offers comparative asset class-wise break-ups between Indian and global wealth held by individuals, thereby providing insights for Indian investors on where they have under-invested or over-invested.

India's growth has emerged to become one of the great success stories of the last decade. In fact, despite formidable headwinds in recent years, including the 2008 global financial crisis, the subsequent Euro-zone debt impact, and the persistently high inflation, India continues to be one of the fastest-growing nations in the world.

The Report also presents a break-up of wealth allocated across asset classes and a comprehensive analysis of the investment trend expected in the coming years. With current annual household savings of about 34%, and expected to grow 8% on average, India is well poised to lead wealth creation in the global arena.

In terms of growth, alternative assets topped the list with a rise of 59%, followed by provident fund and insurance, both around 46%. The performance of mutual funds, small savings and savings bank deposits were quite dismal, rising 4%, 1% and -9%, respectively.

Other Key Findings from KPW's India Wealth Report:

• Fixed Deposits and Equities jointly aggregate around 62% of the total Individual Wealth in India
• Indian Investors are more prone towards Debt instruments which comprise 68% of their wealth in comparison to global counterparts at 53%, in case of Equity - the global investors are less risk-averse at nearly 41% whereas Indians have invested approximately 32% of their wealth in the same category
• Alternative asset instruments combined with retirement benefit investments like PF & Insurance is poised to grow significantly in the coming years

Estimated Individual Wealth in the world

The total estimated global wealth in financial and physical assets with HNIs in December 2010 was US$ 42.7 trillion.

Estimated Individual Wealth in India

The amount of overall wealth in India has been calculated on the basis of the sum of all investment assets. For the purpose of this Report only the financial investments with individuals have been considered, and does not include government and institutional holdings along with physical assets like Gold and Real Estate

The total wealth in India held by Individuals is estimated to be 86.5 lac crores. The detailed break-up is as follows:

TABLE 1: ASSET-WISE BREAK-UP OF INDIVIDUAL WEALTH IN INDIA

Asset Amount (in Crore) Proportion

Fixed Deposits & Bonds 26,76,878 30.95

Direct Equity 25,76,317 29.78

Insurance 15,25,73 17.64

Savings Bank Deposits 6,16,917 7.13

Small Savings 5,23,908 6.06

Provident Fund 4,11,901 4.76

Mutual Funds 2,88,543 3.34

Alternative Assets 29,565 0.34

Total 86,49,764 100.00

If we broadly consider the key asset classes, the same individual wealth in India stands as follows:

TABLE 2: ASSET CLASS -WISE INDIVIDUAL WEALTH IN INDIA

Name of Asset Amount (in Crore) Proportion

Equities 27,49,569 31.79

Debt 58,70,630 67.87

Alternative Assets 29,565 0.34

Total 86,49,764 100.00

Comparing this with how investors globally invest their wealth, it may be observed that globally, approximately 53% of individual wealth is in Debt investments, 41% in Equity and 6% in Alternative Assets.

As retirement benefits become more limited for the newer generation of government employees, we expect that segment will begin to increasingly focus on retirement planning. As awareness increases, more investments will be channelized into pension funds and retirement benefits as we will see a rise in insurance investments as private companies become more evolved.

Also as Indian companies are becoming more mature, and with increasingly more companies getting listed, Individual Wealth in equities is expected to reach 37% in India in FY 16, against 30% in FY11.

India's individual wealth in alternative assets is 0.34% of our total wealth in comparison to 6.2% globally; we believe that alternative assets will be a major investment avenue in India over the next few years. Alternative assets - including structured products, private equity and venture capital funds, Gold ETFs, and realty, film and art funds - are expected to grow at a rapid pace of 100% per annum.

Year Wealth(In lac crores)

FY 2011 86.5

FY 2012 106.87

FY 2013 132.00

FY 2014 163.00

FY 2015 201.29

FY 2016 248.62

If you want to download the report, please click here

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