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About 26% Indian Investors Changing Strategies To Manage Top Investment Concerns

Rising inflation (34 per cent), a recession (27 per cent) and an uncertain global economy (22 per cent) are key worries for investors internationally

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About 66 per cent of local investors are more actively managing their wealth and making changes to their investment strategies, given current economic challenges, as per Standard Chartered’s Wealth Expectancy Report 2022.

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

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

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

It mentioned that 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 per cent to 7.6 per cent in the next year based on survey responses," it added.

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

 The research also revealed that 81 per cent 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 per cent of global investors hold digital assets, compared to 74 per cent in India. Looking ahead, 81 per cent 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 per cent), and 33 per cent 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.

While most global investors polled (62 per cent) were primarily managing their own finances, with some variation across markets. Many investors in India (42 per cent) use professional wealth managers. 

On average, across the 14 markets, younger (18-35) investors (63 per cent) are more likely to use a professional compared with 39 per cent in the 55 plus bracket, the report stated.

On average, investors taking advantage of professional advice were more likely to have diversified portfolios and higher holdings in sustainable investments, as per the report.