real estate investment trusts: Over 90% of retail investors bet on new-age financial products; will this trend continue?
Blame it on the subdued returns given by assets such as fixed deposits or gold, or the COVID-induced work-from-home environment, retail investors have emerged as a new don of Dalal Street.
“India is becoming a nation of investors from the nation of savers,” according to Vasanth Kamath, chief executive officer of smallcase.
But what’s worth noting is the growing interest of retail investors into new-age financial products.
About 93% of retail investors are interested in investment in financial products such as real estate investment trusts (REITs), smallcases, crypto, and digital gold, according to a study by smallcase and business advisory firm Zinnov.
About 38% of retail investors are interested in actively investing in new IPOs, and more than 70% of them save up to 30% of their monthly income for investments.
This demonstrates their low to medium risk appetite, and shows a vital shift in their mindset.
Will this trend continue?
Such a critical shift in the Indian retail investors’ preferences is corroborated with the substantial growth of smallcases, cryptocurrencies, and REITs.
“Because of the increasing risk appetite, and growing investment horizons, investors are ready to park funds from a longer-term horizon,” Kamath said.
With their appetite for risk growing and the increasing availability of new products, the need to educate them in order to be able to make sound investment decisions is even more critical.
““With more Indian retail investors adopting new-age financial instruments and experimenting with diverse portfolio creation…decoding their behaviour and investment preferences have become table stakes,” said Atit Danak, partner and head – CoNXT Practice, Zinnov.
When asked if instruments like fixed deposits or public provident funds will lead the investment list of retail investors, both Kamath and Danak believe that the secular trend of allocating to equities will not change, even if investments in these traditional assets grow.
The steady rise in systematic investment plan (SIPs) investments is a reflection of the growing interest of retail investors in equity as an asset class, and this is expected to only get bigger in the years to come.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
