High Net Worth Individuals (HNIs) in the Asia-Pacific region are likely to increase their exposure to equities and fixed-income holdings and reduce holdings in cash and deposits by 2012. They are also likely to trim investment in real estate, according to the Asia-Pacific Wealth Report 2011 released by Merrill Lynch Global Wealth Management and Capgemini.

India's HNI population grew at 20.8 per cent to 1,53,000 compared with 1,26,700 in 2009. India's HNIs increased their exposure to equities, real estate, gems and jewellery in 2010.

Fixed income to rise

“In 2012, we estimate that the exposure to equities will be around 35 per cent which is similar to the pre-recession levels. The exposure to fixed income is likely to increase to 29 per cent from 26 per cent last year,” said Mr Atul Singh, Head of Global Wealth Management, Merrill Lynch Global Wealth Management.

“However, due to high prices, there will be a trim down in investments in real estate. It should make up around 21 per cent of the HNWIs' asset allocation compared with the 23 per cent allocation last year,” said Mr Singh. Allocation to alternative investments is expected to increase to eight per cent from six per cent in 2010.

The population of HNIs in Asia-Pacific grew 9.7 per cent to 3.3 million, making the Asia-Pacific region as the second largest market for HNIs after North America. The wealth of HNIs in India grew by 22 per cent to $582 billion in 2009-10, from $477 billion in 2008-09.

“Ultra-HNWIs in Asia-Pacific rose 14.9 per cent to 23,000, while their wealth jumped 16.8 per cent in 2010, beating increases of 10.2 per cent and 11.5 per cent in global UHNWI population and wealth respectively,” said the report.

The report shows the increase in ‘passion investment' (investments in gems, jewellery, antiques, art, sporting teams). The passion investment in gems and jewellery increased to 37 per cent in 2010 from 33 per cent in 2009.

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