India’s high net worth (HNI) population grew by 10.5 percent, with a total of 308 people now in the ultra-rich category. According to Capgemini’s “World Wealth Report,” this rose 7.8 percent to 22.5 million people worldwide, whose wealth rose 8 percent to $86 trillion despite the pandemic.
“The demographics of HNIs have continued to evolve, with increasing numbers of women, LGBTQ+ individuals, millennials and Generation Z seeking wealth management services. Each of these emerging client segments has its own values, preferences and requirements that many wealth management firms cannot currently provide,” the report said.
Although the number of HNIs in India is very low compared to other countries, the total wealth of the Asia-Pacific region as a whole was $25.3 trillion, a growth of 5.4 percent in 2021.
There were 261 HNIs in India in 2020, increasing to 308 in 2021. The total wealth of these Indians increased by 11.6 percent.
The report noted that several factors contributed to this increase in wealth. Those factors are:
1]High liquidity support from central bank of India.
2]Support the government’s internal policy.
3]Increase in vaccination drives and
4]Expanding wealth through a highly profitable market.
Notably, the Nifty 50 has returned 24 percent in 2021 and the Sensex has returned 22 percent in 2021.
The report also mentions an interesting fact about ultra HNIs. They are people whose wealth exceeds 30 million dollars. There are 220,221 people in the world who are worth more than 30 million dollars. Across the Asia-Pacific region, India and Taiwan were noted to be the top contributors in the ultra-HNI category.
The global population of ultra-HNIs remained stable at 9.6 percent, but their collective wealth declined by 1 percent, the report said.
Some interesting details were also mentioned in the report.
Women: Women across all wealth brackets will own 70 percent of global wealth within the next two generations, but they also lack confidence in their ability to create or grow wealth in the next 12 months to their primary wealth managers. The report says this is due to women’s lack of investment tools and financial knowledge. As such, they can reap greater returns on investment-related education, the report said.
Digital assets: An interesting insight in the report is that 71 percent of HNIs globally have invested in digital assets such as cryptocurrencies and non-fungible tokens (NFTs). Moreover, about 91 percent of these HNIs who invested in digital assets were below 40 years of age. When asked about these investments, they said cryptocurrencies were their favorite digital asset, followed by exchange-traded funds (ETFs) and metaverse-related assets.
Impact of Covid-19: The report noted that despite the shocks caused by the Covid-19 pandemic, the mood of HNIs was generally positive. Equities remained the preferred investment avenue for them and the overall allocation was similar to pre-pandemic and post-pandemic. But their reaction is yet to be seen as markets now begin to decline in 2022, the report added.
Distribution of equity capital: Japan recorded the highest equity allocation, with 36 percent of HNI wealth invested in equity. Next, 32 percent of HNI wealth in the US was invested in stocks.