Growing preference of Mutual Funds with Millennials

Growing preference of Mutual Funds with Millennials

CAMS report 47% millennials among new investors of FY18-19

Chennai, July 31st, 2019: Indian Mutual Fund Industry witnessed the sharpest increase of new investors in the past two financial years on the back of massive awareness campaigns and increasing confidence of investors in Mutual funds as a route to wealth creation. CAMS, the leading Registrar and Transfer Agent to the Mutual Funds serving 68% of industry assets, on-boarded 36 lakh new investors across Mutual Funds serviced by CAMS during the financial year 18-19. The company conducted a study on the demographics of new investors which pointed to 16 lakh new investors being millennials (age 20-35) translating to about 47% of the new investors. 

Unveiling the report on new millennial investors, Anuj Kumar, President and CEO, CAMS commented, “16 lakh new investors in the age range 20-35 augurs well for the industry. Nurturing and engaging with the millennials to grow their asset base over the next 25 years is a great opportunity.”

The study brought out some surprises about millennials. The segment that usually prefers DIY (Do it Yourself) mode, have largely taken the assistance of intermediaries to start their investment journey. While Banks have contributed over 30% of the 16 lakh new millennials, 14% have opted to go the DIY way. Among these DIY investors only 32% have chosen digital channels to transact with over 60% preferring paper mode.

Anuj Kumar further added “With nearly 26% of them diversifying into a second fund in the very first year, the trend points to growing confidence of this segment in Mutual Funds.” 

The report brings out that nearly 63% of millennials have chosen the SIP route with equity funds being the preferred asset class. Even among those who entered with lump-sum investment, 45% have subsequently started an SIP. With a ticket size of about Rs.2000, the SIP inflows will garner about Rs.3000 Crores annually, should they stay invested. Hand-holding these first- time investors to stay invested is paramount for Mutual Funds and distributors.