Indians invested maximum in debt in 2016: Karvy Wealth report

While demonetisation may alter the investment pattern and preferences of Indians in the coming year, the individual wealth continued to be higher in financial assets (Rs.172 lakh crore) than physical assets (Rs.132.2 lakh crore) in 2016, according to the Karvy India Wealth Report 2016. However, in a reversal of trend observed in 2015, the growth of financial assets fell to 7.14% in 2015-16, compared with 19% in 2014-15. On the other hand, physical assets grew by 10.3% compared with a decline of 2% in 2014-15.

In another change, direct equity was replaced by fixed deposits and bonds as the top preference in financial assets, with the new pack leader adding up to Rs.36.81 lakh crore, or 21.4% of the asset pie, as opposed to Rs.33.26 lakh crore last year. Direct equity fell to the second spot with Rs.29.63 lakh crore compared with Rs.34.39 lakh crore last year. Mutual funds, on the other hand, grew from Rs.5.52 lakh crore to Rs.6.23 lakh crore this year, a year-on-year rise of 12.9%. Insurance with 14.8% and savings deposit at 12.5% followed the asset leaders.

In physical assets, gold continued to be the preferred investment with Rs.65.9 lakh crore as opposed to Rs.57.1 lakh crore last year. It’s share in the asset pie rose to 49.8%, with real estate coming at the second spot with 41.9%.

As for overall individual wealth, there was a rise in the share of debt and alternate assets with 43.1% and 25.6%, respectively, followed by real estate and equity at 18.2% and 13% respectively, according to the report.

PHYSICAL ASSETS GREW FASTER THAN FINANCIAL ASSETS