The findings of a recent HSBC survey of non-resident Indians will come in handy for investment advisers, as it spells out their investment objectives and risk appetite.
The Global Indian Pulse is based on responses from more than 4,150 global Indians in nine different markets, making this one of the largest studies focusing on the global NRI diaspora.
The survey also reveals a strong intention to increase their investments in India and in their countries of domicile. It also looks into investment habits, feelings on sustainability and plans for the future.
A major part of the survey focused on NRIs in the UAE.
Despite pandemic-induced upheavals, Emirate-based NRIs feel optimistic about the future. Two thirds (68%) are planning to increase their investments in the UAE and India (66%). Around nine in 10 are already investing in the two countries.
“This kind of surveys and findings are roadmaps for investment advisers to structure their offerings according to the taste and risk appetite of potential clients. This also makes their job easy and useful while making their marketing strategies. Just feel the pulse (the survey is aptly named Global Indian Pulse) and plan your strategy,” said Joseph Philip, managing partner, Stuart & Hamlyn, Chartered Accountants and Consultants, Dubai.
Most of the NRIs who participated in the survey are investing in both the UAE and India, and a majority have increased their investments over the past three years.
Two-thirds are planning to increase those investments in the next three years, more than their countrymen living in the US, Europe and elsewhere. This demonstrates a sense of optimism, despite the upheavals of the pandemic.
Almost nine in 10 NRIs feel a strong connection to India (84%) and are interested in its success. Nearly three quarters (73%) are likely to live in India in the future, although a majority (61%) are planning to retire in the UAE itself.
“Fund managers can target potential investors who plan to retire in the UAE or India and structure their offerings of retirement plans, pension funds, provident funds, mutual funds or other similar instruments, accordingly,” said Philip.
A sense of optimism is particularly marked among UAE global Indians over 30 years of age.
They are more likely to be planning to increase their investments in both India (74% vs 56% of 18-29 year olds) and the UAE (70% vs 57% of 18-29 year olds).
Men (72%) are more likely than women to be planning increases in their investments in India (61%). This may be linked to men being more likely than women to be planning to live in India.
UAE-based Indians are mostly planning to increase their investments in the UAE for financial reasons but over a third are motivated by wanting to promote positive change in the UAE. This illustrates the sense of commitment that many NRIs have to the UAE, the survey said.
Property most preferred
UAE-based Indians see property as the most important investment class in the UAE, followed by stocks and shares.
Local businesses are also significant, mentioned by a third. NRIs rate property (54%) and stocks and shares (40%) as the most important areas to invest in the UAE. In third place are local businesses (36%).
For affluent NRIs, local businesses are particularly important, chosen by 51%, the most popular answer among this segment. Property comes second on 45%.
This highlights the depth of the commitment many wealthier NRIs have to the UAE.
Motivations for increasing investments in India are similar, with returns (42%) and promoting positive change in India (39%) the second and third most important reasons.
But family and friends remaining in India comes top (48%) and planning to return to India is a factor for 39%. Both of these score higher among UAE NRIs compared with global NRIs overall (41% and 33% respectively).
Sustainability matters to UAE-based Indians, with four-fifths (78%) saying that environmental or social initiatives are a key part of their decision to invest.
“There is new found interest in [Environmental, Social and Governance] products these days. ESG assets are expected to represent more than a third of the $140 trillion in projected total assets under management by 2025, and advisers can target this segment of investors to market their investment products,” said Rajagopalan Ramesh, chief executive, Veracity Consulting.