Gold and silver most preferred investment options of India's super rich
After commodities, the equity-39%, real estate - 28%, debt– 22% and alternate investments - 11% were the most preferred segments for UHNH in FY16.
With the growing economy, the population of rich persons in India has increased. A report said that the commodities market has emerged as the most favourable investment segment for Ultra High Networth Households (UHNH) in FY16.
Kotak Wealth Management, on Tuesday, released its sixth edition of 'Top of the Pyramid' titled "Optimism Uninterrupted", highlighting the earnings, spending and investing patterns of India's UHNIs.
The report defines Ultra High Networth Households as those that have a net worth of atleast Rs 25 crore over ten years.
These super rich prefer investing in gold and silver. "Physical buying is the preferred purchasing method for 80% of ultra HNIs investing in gold and 74% of those investing in silver. However, for energy-based commodities, more than half invest directly through exchanges, online portals, and brokers", the report said.
Apart from commodities, equity - 39%, real estate - 28%, debt - 22%, and alternate investments - 11%, were the most preferred segments for UHNH in FY16, the report added.
On the back of the positive mood in the economy, the rise in consumption, the report suggested that the number of UHNH is likely to jump to 2,94,000 by FY21 compared to 1,46,600 in FY16.
In FY16, the UHNHs in India increased by 7% and saw a compounded annual growth of 16% over the last five years. "They represent an accumulated net worth of Rs 135 trillion, a growth of 5% over last year and 18% compounded growth over the last five years", the report said.
Interestingly, though the number of UHNHs have increased, the average age is reducing as nearly half are below the age of 40, the report pointed out.
Dipak Gupta, Joint Managing Director, Kotak Mahindra Bank Limited, said, “India emerged as one of the strongest larger economies in the world, despite bumps such as the stress in the banking sector and a choppy stock market performance".
Contrary to popular assumption, 61% of UHNHs between the age group 36-50 years are keeping up the latest trend of wearable technology, rather than those below 35 years old. Wearable devices such as smartwatches, fitness bands, virtual reality headsets, and headphones were popular with a whopping 81% of UHNIs, deeming them as a status symbol.
Amongst luxury spends, jewellery and apparel remained the top spending category for UHNIs. The domestic market is the preferred destination to shop, followed by Dubai, Singapore, and Europe.