We uncover what’s driving retail investment growth.

The News

AMFI’s latest report reveals that retail investment in mutual funds is stronger than ever, with SIP contributions reaching a record ₹25,323 crores in October. This is the first time monthly SIPs have crossed ₹25,000 crores.

Here’s a snapshot of monthly SIPs in October over the years.

SIP Contribution in October

A big contributor? Young investors. The data shows that investors under 30 now make up 40% of the market, up from 23.5% in 2020. Here’s what’s driving this trend:

1. Increased risk appetite
The current generation’s ability to take risks has grown significantly with survival no longer the primary concern, so people are more willing to explore stocks and mutual funds.

2. Digital infrastructure
The rise of smartphones, internet penetration, and digital infrastructure made investing easier than ever. It does not even take 30 minutes to open a Demat account or start a SIP.

3. Lockdown
The stock market and mutual funds witnessed an inflection point during the lockdown. Stuck at home, more people turned to investing.

Combine these factors and you get a generation that’s more engaged and proactive in wealth creation than ever before. It’s quite visible in numbers too.

  • Surge in Accounts: India now has 17.9 crore active Demat accounts as of October 2024, with more accounts added in the past two years than in the entire decade from 2011 to 2021.
  • Mutual Fund Growth: AUM in mutual funds reached ₹68 lakh crore, setting a new record high, driven by higher SIP contributions and a growing base of individual investors.

How is it reshaping the investing landscape?

Indian households have traditionally favored fixed deposits (FDs) and savings accounts, but this is shifting.

FDs and savings now make up 39% of household assets, down from 50% in 2019. Equities have nearly doubled to 12%, while mutual funds have grown from 8% to 11%, reflecting a shift in investment preferences

To conclude

In recent months, domestic institutional and retail investors have stepped in to support the markets, balancing out foreign sell-offs.

With millennials and Gen Z now making up a large part of the investor pool, it will be interesting to see how the investing landscape evolves as this generation continues to shape the future.