Millennial investors flock to mutual fund space, shows data

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Express News Service

BENGALURU: Fintech players in the country have seen millions flocking to Mutual Fund (MF) in the financial year ended March 2021, on the back of the active participation from the millennial age group (25-40 years). The MF industry has added a massive 8 million new investors in the pandemic year. 

Data released by the Association of Mutual Funds in India (AMFI) showed there was a 37 per cent rise in MF assets to Rs 32.43 lakh crore in April 2021, up from Rs 23.53 lakh crore last year.

Experts say that small town retail investors are now attracted to savings through various MF schemes with easy tech adoption, a trend that led to higher individuals’ share in total MF assets at 52.6 per cent as of April 2021.

In value terms, the MF assets held by individual investors rose from Rs 12.25 lakh crore in April 2020 to Rs 17.06 lakh crore in April 2021, according to AMFI.

Terence Lucien, Head of Mutual Funds & Gold, PhonePe told this publication that investors from even the remotest cities in India have access to market-leading investment options that were earlier limited to those from larger cities.

“At PhonePe, we saw an annual growth of over 250 per cent in the number of new investors. Digital distribution has been playing a huge role in growing the industry’s customer base in recent years,” he added.

A significant growth in retail investors on the tech platforms is also due to cost effective models introduced by the start-ups engaged in MF distribution.

Zerodha Co-founder Nikhil Kamath said unlike traditional asset management companies (AMCs), its coin business model involves transparency.

“Traditional AMCs have always charged users in the form of commission, which have been inefficient charges in-grained into the system,” he noted. 

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