How millennials invest in mutual funds

May 5, 2023

By: Anagh Pal

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Millennials dominant segment among new investors

In the last five years, millennials have made up the largest proportion of new investors in mutual funds, with their percentage reaching a peak of 57% in FY20.

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Growing confidence among women

In FY23, women millennials accounted for up to 30% of the new millennial investors, indicating the growing financial independence and confidence among women to choose financial assets to create wealth.

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Millennials choose equity as first investment

Most millennials have made the choice to make the first investment in equity funds in FY22 and FY23, with 89% and 90% investing in equity schemes in these years.

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SIP is the way to go

Two-thirds – 51.4 lakh of 76.5 lakh millennials – have chosen the systematic investment plan (SIP) route for their first investment.

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Sizeable lump-sum investments

A third of new millennials (25 lakh) have made a lump-sum investment. Around 20% of new millennials enter the market with an investment between ₹10,000- ₹50,000.

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Diversification of fund houses

Nearly 43% of millennials are expanding their exposure to more than one fund house indicating that they are not limiting themselves to a single fund house, and are exploring a diverse range of options.

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Need professional guidance & advice

Contrary to the common belief that millennials prefer to invest directly in mutual funds, 95% of millennials have opted to use advisors or distributors to start their mutual fund investments.

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Not 100% digital

Despite being referred to as the internet generation, almost 25% of new millennial investors have entered the mutual fund industry via paper mode.

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How much millennials invest

Millennials have contributed over ₹30,000 crore in gross inflows in the past two years. Equity schemes have registered gross sales of ₹65,145 crore in the last five years.

Credit: Pixabay

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