How HNI investors are navigating the current volatile market | Simply Save

The portfolio construction of HNI or High Net Worth Individual investors is very different from retail investors as the former can take higher risks and can invest in a wide range of assets.

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Rich investors frequently allocate their investments across a diverse array of financial assets such as stocks, real estate, businesses, and various investment vehicles.

Additionally, they typically enjoy a broad spectrum of financial services and investment prospects, encompassing private banking, wealth management, and customised investment strategies.

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Roopali Prabhu, Chief Investment Officer and Head of Products & Solutions at Sanctum Wealth explains how HNI investors are positioning their portfolios given higher interest rates and the secular rally in equity markets over the past three years, key investment trends and how HNIs can minimise risk while maximising gains.

Here’s a summary of what Prabhu said.

• HNI investors, by definition, have a larger corpus, which allows them to build optimal portfolios, because they typically don't have goals that they need to plan for.

• HNIs usually are more focused on wealth creation than wealth conservation.

• Rich investors are circumspect about investing further in midcap and small-cap stocks. The preference is beginning to shift in favour of large-cap stocks.

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• Investors are not as excited about international equities as they used to be until about a year-and-a-half ago.

• Post Covid, HNI investors have shown increased interest in passive mutual funds.

• There's been greater interest in direct bond exposures after the debt taxation changes in the last budget.

• The rally that happened in Bitcoin in 2023 caught many investors by surprise.

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• There is no serious investing interest in crypto assets by HNIs.

• Some investors have minimal allocations such as 20 to 30 basis points of their overall portfolios in crypto assets.