Karvy India Wealth Report finds that mutual funds have a modest 3.4% of this individual wealth pie.
Karvy has recently released an India Wealth Report 2012 that gives an update on individual wealth in India. According to the report, the individual investors investment in mutual fund increased to Rs 3.11 lakh crore from Rs 2.84 lakh crore in FY 11. Debt oriented funds grew by 17.2 percent while equity oriented grew by 2 percent compared to last year. Mutual fund gold portfolio grew by 61 percent over twelve months.
Here are the significant highlights of the report:
- The individual wealth in the country grew to Rs 92.26 lakh crore as on March 2012 from Rs 86.5 lakh crore previous year. The total individual wealth in India is expected to double to Rs 179 lakh crore in next four years from the current Rs 92.26 lakh crore.
- Investments in direct equity would form 28.7 percent of the total assets in FY17 as compared to 25.5 percent in FY12. This would reflect the increase in confidence of investors in stock markets and would be single largest sub- asset class.
- The insurance industry has been growing at an average rate of over 22 percent for the last decade. Investments in insurance come not only in form of new policies sold but also renewal premium which are higher than first year premium collected. The wealth held by individuals in insurance will grow at CAGR of 21 percent in next 5 years.
- Though alternate assets which include structured products - private equity, venture capital funds, gold ETF, films and art fund had been flat in FY12 are expected to grow by more than 3 times by FY17.
- With the expansion in the organized sector workforce, India’s pension fund market is set to grow at a rapid pace in coming years.
Last year, the proportion of debt as an asset class for investments grew sizeable due to the volatile equity markets. The debt component constituted 72.3 per cent of the investments from 67.9 per cent previous year. This was primarily driven by reduction in equity from 31.8 per cent to 27.4 per cent, it said. Within debt, bank fixed deposits constituted the highest component at 94.42 per cent or Rs 21.8 lakh crore invested in FY 12.
The report also described the general asset allocation followed by individuals. An individual usually invests 25.4 percent of his portfolio in direct equity, 25.1 percent in FDs and bonds, 19.7 percent in insurance, 14.3 percent in saving deposits, 6.2 percent small saving, provident fund 5.6 percent, mutual fund 3.4 percent and alternate assets 0.3 percent.
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