Indian investors reinforce trust in physical assets | Value Research Although optimistic about stock markets, Indians vouch for real estate investments...

Indian investors reinforce trust in physical assets

Although optimistic about stock markets, Indians vouch for real estate investments...

Indian investors have reinforced a preference for capital retention over investment gains, following the post-crisis market volatility. An overwhelming 83 per cent of Indian respondents, in a survey conducted by Franklin Templeton Investments, affirmed faith in country’s stock markets. However, a majority of the investors still plan to adopt a more conservative strategy in 2013, similar to the global trend.

Risk avoidance has led many investors to remain on the sidelines. “Despite investors’ overall positive outlook, it appears that avoiding loss, rather than achieving higher returns, is still a top priority,” said Greg Johnson, President and Chief Executive Officer, Franklin Templeton Investments.

Indian respondents reflect the highest return expectations with at least 15 per cent gains in 2013, and 22 per cent over next ten years. However, high inflation has withheld investors from investing in stock markets. The top three asset classes cited by Indian investors for 2013 and the next ten years are:

Middle income investors’ exposure to mutual funds is a quarter of their total investments and they expect it to increase by one-third over the next five years. Investors also expect local equity and fixed income markets to outperform their global counterparts.

Purchasing a new home is the top investment goal for investors in India for 2013. Compared to their global counterparts, Indian investors’ focus on retirement as a goal is the lowest amongst all the countries surveyed.

Interestingly, while 97 per cent of Indian investors are confident about achieving their financial goals, a majority of them think they can do it without equity exposure. Another interesting finding is that respondents view professional financial advice as an important or very important factor for making investments - more than two-thirds of investors are willing to pay fees to their distributors/financial advisors for such advice.

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