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Article | Sip - Sep 19, 2017 | 10:33 AM

Investing strategies for the High Networth Individuals

Birla Sunlife - Grow My Money - Investing strategies for the High Networth Individuals
It’s all about that luxury of time, attention, and customization.

As striking as it sounds, an uptick of as much as 140 per cent in the number of high net worth individuals’ (HNIs’) accounts seen in India this year is only a reflection of the potential this space manifests. It was a figure of just some million accounts under the HNI category around 2013-14, but now we are looking at an enormous number of 2.5 million accounts in this investors’ base at the end of 2016-17.

Seems like the HNI do know how to possibly stay rich.

It all boils down to having that extra pound, investing it in the right place and yes, keeping it there a little longer while someone may seek to grow over the long term the way a HNI would prefer.

Today there are so many ways in which the Mutual Fund industry is evolving to cater to specific, nuanced and not-so-ordinary needs of the high-net worth segment. To start with, there is a gamut of strongly-diversified portfolio options which may serve a multitude of investment needs for different appetites, risk-return thresholds and goals in life. Portfolios that may focus with a razor-sharp eye and seeks to enhance wealth for the next generation and capital-augmentation are now available and customizable. Also, a remarkably high level of tailor-made rigor is being given to different individual requirements and inclinations. Personalization of wealth management has assumed a new level altogether

Meanwhile, on the industry front, there is adequate diversification ranging from ultra-short-term bond funds, contingency funds to medium-to-long-term debt funds that aims to balance liquidity and capital formation in a prudent way. Influx of sophisticated Portfolio Management Services, (PMS), has given a new turn to HNI investments wherein picking the right investment at minimum risk but with potential returns is a buoyant theme. PMS alternatives are so tailored to meet individual financial goals that one may invest his money in a single stock which is usually not the case in a MF scenario, since it is heavily dependent on a fund-advisor’s discretion.

Access, prompt and rigorous, to analysis-backed quality advice is usually a salient part in case of HNI investments. This space has also often churned a notable interest in equity mutual funds as a substitute for equity, since there is support of ample advice and attention from experienced and dedicated wealth managers.

Options span from investments in stocks, to income securities. HNI category may also stay cognizant of long-capital-gains tax relief ways through a smart MF strategy. Software-enabled strategies and pronounced use of demat accounts are also dominating this field. There is a palpable change brought in by alternate investments funds that are redefining this category considerably. Investor may consult his financial advisors before investing.

In short, the room for variety and service is prominently high for HNIs.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

 

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TRivia

  • Indian Mutual Funds

    Indian Mutual Funds have currentlyinvested about 1.35 crore (13.5 million) SIP accounts through which investors regularly invest in Indian Mutual Fund schemes. (March 2017. Source: AMFI)

  • AAUM

    Average Assets Under Management (AAUM) of Indian Mutual Fund Industry for the month of March 2017 stood at ₹19.26 lakh crore. (Apr 2017. Source: AMFI)

  • Equity-oriented Schemes

    Equity-oriented schemes account for around 32.8% of the industry's assets. (March 2017. Source: AMFI) Equity-oriented schemes derive 85% of their assets from individual investors. (March 2017. Source: AMFI)

  • HNI Investors

    HNI investors account for 20.98% of investments for a period of 12-24 months. (Source: AMFI)

  • Benefit of Index Funds

    Index funds usually have much lower operating expenses over actively managed funds.

  • What is Net Assets?

    This figure represents the fund's total asset base, net of fees and expenses.