93% retail investors show interest in new age financial products: Survey

The report further states that 50% of retail investors started investing in stocks less than 3 years ago and 38% are actively interested in investing in new IPOs. More than 70% of retail investors save up to 30% of their monthly income for investment with Systematic Investment Plan (SIP), which is the most preferred route of investment with 55% of investors choosing this option.

Investment in REITs has increased by 2% since the first REIT listing in 2019, with the portfolio constituency of investors in the asset class expanding. The direct equity allocation is set to reach 8.1% in 2022 from 7.3% in 2017. Interestingly, digital formats of traditional avenues such as gold are also gaining traction among investors, according to the survey.

The ETF has also seen a 58% growth in folio count and assets under management (AUM) since 2018. Even though traditional investment products like fixed deposits account for the largest share of the pie at 29.2%, their share has declined since 2017. As is the case with Public Provident Fund (PPF), mainly because of the stable interest rates.

Commenting on the changing preferences of Indian retail investors, Vasant Kamath, Founder & CEO, Smallcase, said, “Savvy investors with varied savings are designing their portfolios using new age investment avenues. With increasing penetration and financial literacy, Indian investors are not only shifting large financial transactions to digital mediums, but are also looking at portfolio building, both from the point of view of risk profile and investment horizon. Regulatory progress has also boosted investment democratized.”

Atit Danak, Partner and Head – CONXT Practice, Jinnov said, “Increasing financial literacy and disappointing returns from traditional savings instruments have prompted everyday Indian investors to explore new channels of investment, thereby boosting the Indian equity markets.” Paved the way to play a significant role in the foreseeable future. With less than 2% of Indians investing in mutual funds, this presents a significant opportunity for financial companies to make them attractive to the average retail investor.”

In addition, the report also points to sources of financial information for retail investors. Seventy-three percent of them are informed about financial products, with family and peers being their primary sources of information, while 52 percent turn to financial influencers as an important avenue to learn about money management . Interestingly, 61% of retail investors prefer not to pay for financial advice. Those who are ready to pay are in the age group of 45-60 years and have more than 20% monthly savings.