26% of Indian investors changing investment strategies to manage their top concerns

· 64% look to do more sustainable investments next year, compared to 52% globally

· 81% of Indian investors still believe in digital assets, despite market turbulence

21 December 2022, India – Standard Chartered’s Wealth Expectancy Report 2022 examines the shifts in investor decisions for more than 15,000 emerging affluent, affluent, and high net worth (HNW) investors in 14 markets – including India – along with the resulting movements in major asset classes. Survey results show 66% of local investors are more actively managing their wealth and making changes to their investment strategies, given current economic challenges.

Outpacing inflation

Indian investors cited inflation (23%), an uncertain global economy (18%) and the threat of recession (16%) as their top concerns. Rising inflation (34%), a recession (27%) and uncertain global economy (22%) are key worries for investors internationally too.

In the past year, local investors have made changes to their finances, such as spending less (28%) and making new decisions around their portfolios (26%), which will prompt shifts in major asset classes.

To outpace inflation, 61% of global investors are looking to reduce their cash holdings, compared to 70% in India. Standard Chartered predicts that global cash allocations will fall from 26% in 2022 to 15% in 2023, indicated by investor responses.

Investors are reconsidering their holdings of equities as market volatility increases, although this asset class will remain an integral part of portfolios. Of those currently invested in equities, there is an indication that the allocation of equities in Indian portfolios to fall from 10.8% to 7.6% in the next year based on survey responses.

This year, gold continues to be of high interest for Indian investors, with 61% saying they have invested as a result of inflation, in addition to combat inflation in 2022 there is, interest in value stocks at 60% and bonds at 59%.

Sustainable investments will continue to receive investor interest and capital, even though greenwashing concerns persist. More than half of global investors (52%) expect to increase their sustainable investments in 2023. 64% of investors in India will also do so.

Digital assets continue to interest investors

The research reveals that 81% of local investors still believe that digital assets are an important part of any investment portfolio, despite multiple setbacks in the market this year.

Currently, 66% of global investors hold digital assets, compared to 74% in India. Looking ahead, 81% of local investors surveyed plan to increase their investments in digital assets in the coming year. This is in part because many said they have seen people make significant returns off digital assets (36%), and 33% consider them to be a good way to diversify their portfolios.

However, it is important to note this survey was conducted before the FTX crash and the events of the past few weeks may dampen this sentiment.

Helping investors make better decisions

While most global investors polled (62%) were primarily managing their own finances, with some variation across markets. Many investors in India (42%) use professional wealth managers. On average, across the 14 markets, younger (18-35) investors (63%) are more likely to use a professional compared with 39% in the 55+ bracket. On average, investors taking advantage of professional advice were more likely to have diversified portfolios and higher holdings in sustainable investments.

Saurabh Jain, Head, Wealth Management, India, Standard Chartered Bank, said, “As inflation and geopolitical tensions drive uncertainty in the investment outlook, many investors have cited that complexities in preparing and changing investment strategies are making it harder for them to pursue new goals. At Standard Chartered, we are committed to helping clients realise their wealth goals by providing high quality investment insights, innovative products and secure digital platforms.”

Nitin Chengappa, Head, Affluent, Private Bank, NRI and Deposits, India, Standard Chartered Bank said, ‘‘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. Investors are considering to lower their assets in cash and are opting for more sustainable investments. We expect this period of flux to continue till inflation and recession worries abate.”

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