Millennials are increasingly showing interest in investing in the markets and mutual funds, according to a recent report by Computer Age Management Services (CAMS). The report reveals that over the last five fiscal years, 7.65 million new millennial investors have entered the MF industry. However, what’s even more intriguing is that 23% of new millennial investors have already fully redeemed their investments.
Despite this trend, the new millennial investor base stands at 5.6 million with an assets under management (AUM) of ₹96,425 crore. The study also indicates that two-thirds of new millennial investors prefer systematic investment plans (SIPs) as their mode of investment. Additionally, the report highlights millennials’ acceptance of financial advice, with 95% of investors choosing advisers or distributors to begin their MF journey.
The CAMS study also highlighted some interesting trends, including millennials’ preference for investment advisers or distributors to guide them in their investments. 35% of new millennials have been sourced by registered investment advisers (RIAs), which has skewed the share of urban cities. However, the mutual fund distributors (MFDs’) continue to champion mutual fund growth in both T30 and B30 markets.
The bulk of the new millennial investor base, about 86%, comes from T30 cities, while the rest (14%) comes from B30 cities. Interestingly, 70% of new millennial investors in T30 cities use electronic mode to open their MF accounts, while 80% in B30 cities choose paper or physical mode.
In conclusion, millennials have shown an eagerness to test the markets via MFs, as per the data. The report highlights the importance of investment advisers and distributors in guiding millennials through their investment journey. As we move forward, it will be interesting to see whether this trend continues and whether more millennials delve into investing in mutual funds.
Related Facts:
– Seven out of ten new millennial investors prefer SIPs as their mode of investment, according to the report.
– Over the last five fiscal years, the gross inflows from millennials have been ₹1.03 trillion, with 62% of it flowing into equity and hybrid funds.
– The bulk of the new millennial investor base comes from T30 cities, while the remaining 14% comes from B30 cities.
Key Takeaway:
Millennials are increasing their investment interest and seeking better returns through mutual funds. They prefer investment advisers or distributors to guide them and are now increasingly opting for systematic investment plans. The data also suggests that paper-based or physical mode of investing still dominates B30 cities while electronic mode dominates the T30 cities.
Opinion:
The fact that 23% of new millennial investors have already fully redeemed their investments is concerning. It suggests either a lack of confidence in the mutual fund industry or unrealistic expectations about returns. However, the data also reveals a growing acceptance of financial advice among millennials, indicating that they are willing to seek support in navigating the complex world of investments.
