Mutual funds turn out to be the most attractive avenue for millennials in FY19. As per CAMS’ report ‘growing preference of mutual funds with millennials’, about 47% of new investors of mutual funds in FY19 turn out be millennials, ageing between 20 years and 35 years.
Among the first time FY19 millennial investors, around 60% of them are residing in the top five Indian cities, the following ten cities form 12% while the following fifteen cities contribute about 4%. Cities and towns that don’t feature in the top 30 cities constitute about 24% of the millennials investing in mutual funds for the first time in FY19.
24% of the millennial first-time investors in FY 2019 are women. Around 36 lakh new investors entered the mutual fund industry in FY 2018-19 through CAMS.
The Indian mutual fund industry has seen the most explicit rise in the number of new investors over the past two fiscal years. The most significant reason behind the steep increase in the number could be awareness drives in building the investors’ confidence in mutual funds.
Further, the report shows that millennials prefer ‘do it yourself’ mode of investment, with intermediary assistance to begin their mutual fund investment journey, around 14% opted for this.
The CAMS’ report further shows that about 63% of the first time millennial investors in FY19 invested through SIP. Equity funds were the least preferred, for the apparent reason of market risk and volatility.
Around 45% of those who invested in a lump sum later turned towards SIP. The investments through SIPs will sum up to about Rs 3,000 crore a year, considering they stay invested. It’s on the fund houses and distributors to keep investors interested.