CAMS which provides services to nearly 70% of the Indian Mutual fund industry shared an Interesting report on new millennial investors titled “The emerging force of millennial investors is here to stay & grow”
Here are some of the highlights:
How many new mutual fund investors did we see in CAMS serviced funds?
- 1.57 Crore new investors during the five-year period FY19-FY23, Of these 1.57 crore, 84.8 lakh were millennials with 54 % share.
While 84.8 lakh new millennials entered MF between FY19 to FY23, only 76.5 lakh made investment in this period. 8.3 lakh investors have remained as Prospect folios without investment and hence not included for further analysis.
What’s the demographics of the new millennials?
Age range
- As we can see in the chart below, 50% of the millennial investors are born between 1991-96
Location
- The below picture nicely illustrates the location wise trend with nearly 86% investors belonging to Top 30 cities. 75% in the top 5 (!) cities.
Gender:
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We are slowly witnessing a progressive increase of women millennials making upto 30% of new millennial investors in FY23.
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It is a great sign of financial independence and growing confidence of women to choose financial assets led wealth-creation, thus narrowing the gender divide in the traditionally male dominated investment space.
Investment type preference:
Millennials love equity
- Barring the peak pandemic phase, 9 out of 10 Millennials have preferred investing in equity schemes.
Scheme-wise trend
- At the first glance, the key change that one can notice is: Growing popularity of thematic funds and declining trend in folks buying large cap funds.
How did they start investing? Lump-sum or SIP
- 2 out of 3 investors have preferred taking the SIP route.
SIPs - An Overview
Investments via SIP
- While the mass of new millennial entrants has chosen sub Rs.1000 slab for their SIP commitment, over
22% of the fifty-lakh plus new entrants are in >Rs.2,000 slab.
SIP Registration Trend FY19-FY23
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Millennials have added 1.03 crore SIPs during the five year period in addition to the 51 lakh SIPs made as initial investment. This cumulative 1.54 Crore SIPs are 29% of the total 5.3 crore SIPs registered across segments between FY19-FY23.
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Share of SIPs from new millennials in the overall SIP registration in CAMS serviced Funds has seen a staggering growth from 19% in FY19 to nearly 33% in FY23.
Who are bringing these investors to markets and how?
- In sharp contrast to the intuitive conclusion that millennials are likely to go the Do-it-Yourself (Direct) way, 95% of millennials have chosen advisors or distributors to begin their MF journey.
Redemption & SIP cancellation trends
Out of 1.54 Crore SIP registrations, 37% (57 lakh SIPs) were cancelled.
Out of the 76.5 lakh new millennials who entered Mutual Funds, about 17.6 lakh investors have exited during the course of the five years,redeeming their portfolios in full. Out of these 17.6 lakh, nearly 12 investors (68%) booked gains and 32% have booked losses.
How much did they invest?
Cumulative gross inflows between FY19-FY23 amounted to Rs. 1,03,744 Cr.
The bifurcation of which can be seen below:
- In the last 2 years, Gross inflows from millennials amounted to over Rs.30,000 Crore.
So, how much do these 56 lakh investors hold?
AUM of these 56 lakh investors as at March 2023 is at 96,425 crore.
Out of which:
Nearly 25% of the investors portfolio value is less than Rs. 10000
Another 30% have their portfolio value somewhere between Rs 10000-50000.
About 39% have their portfolio value ranging between 50k- 5lk
About 6% of the investors have their portfolio above 5 lks and only less than 10% among these 6% hold above 25lks