More Indians are changing their investment strategies and actively managing their wealth amid rising inflation, recession fears, and global economic uncertainties, an international study by the Standard Chartered Bank has found.
The Wealth Expectancy Report 2022, the third iteration since 2019, examines the shifts in investor decisions in 14 markets, including India, and the resulting movements in major asset classes.
Changing Financial Strategies
The study showed that 66 per cent of Indian investors are changing their investment strategies. Twenty-three per cent of investors cited inflation as one of their main concerns. Eighteen per cent said the uncertain global economy, and 16 per cent stated recession as their primary worry. Internationally, 34 per cent stated rising inflation, and 27 per cent indicated recession as their key worries.
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Over the past year, Indian investors have made several changes to their finances to cope with the market turbulence. Twenty-eight per cent said they spent less and 26 per cent said they have made new decisions around their portfolios.
Seventy per cent of Indian investors said they would reduce their cash holdings, compared to 61 per cent globally, to outpace inflation.
The Standard Chartered study forecast that global cash allocations would fall from 26 per cent in 2022 to 15 per cent in 2023.
Investors are reconsidering their equity holdings as market volatility increases, although this asset class will remain an integral part of their portfolios, Standard Chartered said in a press release.
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Equity allocation in Indian portfolios would fall from the current 10.8 per cent to 7.6 per cent next year, the survey revealed.
But gold continues to be of high interest to Indian investors, with 61 per cent saying they have invested in the yellow metal to combat inflation .
In addition, 60 per cent said they are interested in value stocks and 59 per cent in bonds to combat inflation.
The report claimed sustainable investments would continue to draw investor interest, even though “greenwashing” concerns remain.
Fifty-two per cent of global investors expect to increase their sustainable investments in 2023, compared to 64 per cent in India.
In the press release, Saurabh Jain, head of wealth management, India, Standard Chartered Bank, said, “As inflation and geopolitical tensions drive uncertainty, many investors have cited that complexities in preparing and changing investment strategies are making it harder for them to pursue new goals.”
“There has been a clear shift in the way Indian investors are managing their wealth. They are making feasible alterations in their investments to tackle inflation and spread their asset portfolio,” said Nitin Chengappa, head of affluent, private bank, NRI and deposits, India, Standard Chartered Bank.
He added, “Investors are considering lowering their cash assets and opting for more sustainable investments. We expect this period of flux to continue till inflation and recession worries abate.”
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Digital Assets Continue To Draw Interest
Furthermore, the research reveals that 81 per cent of Indian investors still believe in digital assets, despite several setbacks in the market this year.
The report said 66 per cent of global investors currently hold digital assets , compared to 74 per cent in India.
Eighty-one per cent of Indian investors, it said, plan to increase their investments in digital assets in 2023, citing their growth and diversification potential. Also, 42 per cent of Indian investors surveyed said they use professional wealth managers.
The study was conducted in 14 markets, including China, India, Pakistan, the UAE, Hong Kong, Kenya, Indonesia, Taiwan, Thailand, Singapore, and South Korea, from September 26 to October 18, 2022, covering 15,206 respondents.
