Indians invest more in this asset class than bonds, real estate, other assets; this Indian city topped 'Future Cities' list

Knight Frank has launched the 13th edition of The Wealth Report 2019, that provides global perspectives on prime property and wealth. For the year 2018, Indian respondents gave a thumbs up to equities (30%) and bonds (28%) where respondents to the survey said that their clients preferred these high return investment assets. Real Estate with 23% was the third most invested asset class by Indian UHNWIs. Interestingly, liquidity was not the preferred asset which made up only 9% of the total investments of Indian ultra-rich.

Termed ‘Future Cities’ of the world, Several cities demonstrate characteristics that will propel wealth creation as well as future property investment. Leading the table is the city of Bengaluru, which is expected to see a UHWNIs growth of 40% in the next five years. 

The annual publication includes the Knight Frank City Wealth Index; price movements across 100 luxury residential property markets; the results of Knight Frank’s Luxury Investment Index; and, the Attitudes Survey.

Shishir Baijal, Chairman & Managing Director, Knight Frank India, said, “While globally UHNWIs are showing an affinity towards more liquid investments as it is the most risk-averse asset, Indian counterparts, on the other hand, are increasing their exposure in the equity and bonds. There is a sense of confidence amongst Indian UHNWIs on the strength of the countries economic growth which is pushing them to invest in higher-risk assets for shorter periods of time. Real Estate (0%) and Luxury Investments (5%), which are the most illiquid asset amongst remain largely stable.”

Survey Question: On average, what proportion of your clients' investment portfolios is allocated to the following asset classes?

Bengaluru is home to companies including Flipkart, Infosys and Wipro, and over 400 multinationals including Microsoft, Hitachi and Samsung have bases there.

Table- ‘Future Cities’ of the world

Shishir Baijal, Chairman & Managing Director, Knight Frank India, says, “Bengaluru is the first amongst five eye-catching ‘cities of the future’ based on their future economic potential. This growth backed by its intrinsic potential arising from strong economic fundamentals will also attract investments both from domestic as well as institutional sources.”

Overall Asset Allocation in 2018:

The survey is based on responses provided by 600 private bankers and wealth advisers who between them manage over US$3 trillion of wealth for UHNWI clients. In Asia, the numbers showed a slightly more subdued growth, with 58% reporting an increase, 23% recording a fall and 18% who said there had been no change.