Karvy Private Wealth, the wealth management arm of the leading financial-services conglomerate Karvy Group, launched its 9th edition of ‘India Wealth Report 2018’. The report provides a holistic view of all the asset classes that have contributed to wealth creation in the last one year.
Taking forward the acceleration of wealth growth over the last few years, individual wealth in India grew by 14.02% to reach Rs. 392 lakh cr in FY18. This was achieved by a huge 17.42% wealth growth in financial assets and a sober 9.24% wealth growth in physical assets. Direct Equity emerged as the hero to capture the top spot where Indian individuals have their wealth overtaking Fix Deposits. Other notable assets which saw good growth include mutual funds, & alternative investments.
On this occasion Abhijit Bhave, Chief Executive Officer of 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.”
Being the home of the fourth largest population of millionaires in the Asia Pacific region, India was the fastest-growing major market globally in CY17, with a 20.4% HNI population expansion and 21.6% HNI wealth growth. In FY18, positive performance of the equity market made it the most loved asset class for the UHNI/HNIs and direct equity now forms 20.7 % of the total wealth pie of individual financial wealth in India. Mutual Funds remained one of the biggest growth drivers of wealth in FY18 with a growth rate of 34.50% through both an increase in regular SIPs and lump sum investment. Owing to the positive performance in Equities, the traditional bank deposits grew at much lesser single digit growth rates.
Astute investors realised the power of Alternate Investments and the wealth held by individuals in Alternative Investments grew by 33.46%. The recent emerging market currency depreciation also saw a renewed interest in the international investments which saw a jump of 25.83% for FY18. Among physical assets, Real estate was the best performing asset class, growing at 10.35% over the previous year.
It is estimated that the individual financial wealth in India will more than double to Rs. 517.88 lakh crore by FY23 at a CAGR of 16.99%. Direct equity and mutual funds are expected to be the growth drivers of this northward trend, growing at a CAGR of 24.41% & 21.04% respectively over the next 5 years.
