India logs second-highest jump in number of HNWIs in 2021: Report

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The population of high net-worth individuals (HNWIs) rose 10.5% in India to 3.08 lakh last year, only after the US, thanks to liquidity support from central banks and supportive domestic policies, according to Capgemini’s World Wealth Report released on Tuesday.

North America continued along its growth trajectory, boasting the highest increase in HNWI population at 13.2% to 7.46 million individuals in 2021.

Japan followed on the list next with 3.65 million individuals and Germany with 1.63 million HNWIs. India continued to stay at the 12th spot. 

Capgemini categories HNWIs as those with investable assets of $1 million or more, excluding primary residence, collectibles, consumables, and consumer durables.

Globally, unprecedented government stimulus packages, low-interest-rate environments,increased liquidity, stock market gains, and widespread covid-19 vaccinations drove 2021 global economic resilience and accelerated HNWI population and wealth growth.

The report revealed the global HNWI population grew 7.8% (1.7 million new HNWIs), and their wealth grew 8% ($6.4 trillion) in 2021 owing to recovering economies being boosted by the stock market.

The growth in wealth of HNWIs in India and the US was at 11.6% and 13.8%, respectively.

Looking at segments within the total HNWI population, ultra-HNWIs led the wealth and population growth, despite a deceleration in growth rates in 2021 as compared to the earlier period.

“Ultra-HNWIs (more than $30 million) led global wealth and population growth, at the rates of 9.6% and 8.1%. While the millionaires next door ($1-5 million) population (7.7%) and wealth (7.8%) grew the slowest, witnessing acceleration in population and wealth growth rates,” the report said.

Additionally, the mid-tier millionaire ($5-30 million) population and wealth increased to 8.5% and 8.4%.

The report also indicated that the growth gap across wealth bands is shrinking, indicating a more level playing field, due to improved information access for investors and democratization of asset classes.

In terms of asset preference, the report said that, equities remained the go-to asset class, and with healthy stock market returns in 2021.

“Globally, HNWIs maintained the traditional asset class status-quo in their 2021 allocations but were vocal about emerging assets (ESG, crypto currencies, and NFTs) and their desire for better digital and personalized offerings,” said Anirban Bose, financial services strategic business unit-CEO, Capgemini.

According to the report, a survey conducted among global 2,973 HNWIs revealed that 71% of HNWIs have invested in digital assets, and 91% of HNWIs younger than 40 have investments in digital assets.

Furthermore, the respondents said that crypto currencies are their favorite digital asset investment. Exchange-traded funds (ETFs) and metaverse investments are also sought-after digital assets.

Additionally, family offices witnessed increased demand from HNWIs due to better life-stage understanding and emotional connections.

The report also highlighted that thanks to 2021 venture capital (VC) funding, the global unicorn club grew 70%, reaching 1,058 − almost double 2020’s 586.

Fintech was the largest category, accounting for roughly one in every five unicorns (21%), followed by internet software and services (18%), then e-commerce and direct-to-consumer (11%). The US is home to the majority of unicorns (51%), followed by China (17%) and India (6%), the report noted.

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