In India’s dynamic financial landscape, a new force is making waves—the Millennial Investor. Born between 1980 and 1995, these individuals, now in their 30s and 40s, are reshaping investment trends by moving to a new trendy investment avenue in India: mutual funds!
Traditionally, mutual funds were considered as a close-knit club for the financially savvy. Thanks to millennials, mutual funds are shedding their exclusive image. Recent statistics reveal a staggering shift, with a remarkable 54% of new mutual fund investors between 2019 and 2023 falling within the millennial bracket. A massive 85 lakh people have enthusiastically embraced the potential of mutual funds during this period.
But why is there a sudden shift to funds in the millennial era? Let’s find out in this article!
Millennials have experienced a relatively smoother ride—less economic turmoil and more opportunities. This positive backdrop has translated into an adventurous approach to finance. Unafraid of calculated risks, millennials are all about seizing control of their financial destinies.
From savings and spending to venturing into side gigs and investments, they crave new and less complicated approaches. Mutual funds perfectly align with these preferences. Between 2018 and 2022, an impressive 90% of funds flowing into mutual investments found their way into stocks, particularly those of smaller companies.
A notable trend is the increasing participation of women in the millennial investor cohort. In 2023, 30% of new millennial investors are women. This surge is not just a result of more women earning their own income; it signifies a shift towards breaking gender stereotypes in the investment realm. Women actively take charge of their finances, recognising the potential for growth through strategic investments.
Mutual funds offer millennials a way to own a piece of various businesses, with added perks. Rather than investing in a single enterprise—where the risk of losing everything looms large—mutual funds pool money from multiple investors. This collective investment is then strategically spread across a diverse portfolio of companies. This not only offers the advantage of diversification but also helps mitigate risks.
In terms of returns, mutual funds have consistently outperformed traditional investment avenues like fixed deposits, post office savings, gold, and real estate. With an average interest rate ranging between 8-16% for long-term investments—and sometimes even higher—Indian millennials have injected an astonishing ₹1,03,744 crore into mutual funds over the last 5 years.
For millennials seeking to dive into the world of mutual funds, several promising categories stand out, each offering unique advantages:
While millennials in metropolitan cities readily embrace mutual fund investments, those in tier 2 and tier 3 cities face barriers such as limited awareness, financial infrastructure, and language differences. Technology is emerging as a game-changer in this scenario. Apps like Floatr are breaking down these barriers, providing easy access to comprehensive mutual fund information, seamless investment management, real-time updates, and automation.
The growth of technology is reshaping the geographical landscape of mutual fund investments. In 2014, ‘other cities’ contributed a mere 2.55%, but by 2020, this figure had risen to nearly 11%.
The surge in mutual fund investments among millennials in India is not a passing trend; it signifies a tectonic shift in the country’s investment culture. Driven by a desire for financial freedom, conscious investing, and the determination to secure their future, the younger generation sees mutual funds as the ultimate tool for wealth creation.
Don’t miss out on this life-changing opportunity. Join the “millennial mania” and embark on your investment journey today with mutual funds—the key to building wealth early and securing a prosperous future.
Disclaimer: This article has been written for educational purposes only. The securities quoted are only examples and not recommendations.
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