In the new investment culture that is being created in the country, it is clearly visible that today’s young generation is choosing financial options like share market more than “Traditional Savings”. This is why experts believe – if this trend continues, then in the next 10 years the total value of Mutual Funds can go up to almost four times and direct equity holding can reach up to seven times.
Most of the entries are from youth
Currently, among the people who are continuously investing money in SIP, people between 18 to 34 years are at the forefront. Earlier these people used to live in FDs or normal savings, but now their focus is more towards equity side. Currently, about 40% of equity investors are below 30 years of age, whereas five years ago this figure was only 23%. The meaning is clear – the equity market of the future is actually going to be driven by youth.
Big estimate in new report
Bain & Company and Groww said in a report that by 2035 Mutual Fund AUM could reach around Rs 300 lakh crore. Today it is 80 lakh crores. In other words, a large part of India’s wealth growth in the next decade is going to be due to mutual funds.
Huge growth expected in direct equity also
The report says, direct equity may increase from about Rs 35 lakh crore to Rs 250 lakh crore in the coming years. During the same period, mutual fund penetration will increase from 10% to around 20%. That means investing will no longer be the work of limited people.
long investment horizon best
The numbers of the last several years show that if someone holds the money for 5 to 7 years, then the effect of market ups-downs automatically normalizes. Compounding also works wonders in the long run. Indian equity funds have given an average annual returns of 16% in the last two decades.
Changing investing behavior and new jobs
The report also said that new investment methods will create approximately 700,000 new jobs in the coming years. Apart from this, increasing domestic investment will reduce the direct impact of inflow of foreign investors on the Indian market.
What do experts say?
Bain’s Rakesh Pojath says India is entering a “new era” of retail investing, where every common investor is indirectly participating in the stock market. This is strengthening the path to becoming a $10 trillion economy.
Digital platforms have changed the entire scenario.
Today, about 80% of equity investors and about 35% of mutual fund investors are connected to digital platforms. Interestingly, half of these investors come from tier-2 and smaller cities. This means that investment is no longer just a game for metro cities.
Saurabh Trehan of Grove says SIP culture and long-term holding will be the real support system that will sustain the Indian market in the future. This will also be the “economic revolution” of the future.
Comments are closed.