Young Indian Investors Lead Surge in Mutual Fund Market

India witnesses a surge in mutual fund investments driven by young investors under 35. Platforms like Groww report significant growth in SIPs, with increasing female participation. Non-metro cities also showed strong interest, highlighting a trend towards early financial planning and disciplined investing across the nation.

Young investors in India have emerged as a major driving force behind the flourishing mutual fund market, as platforms like Groww record a notable increase in participation. Currently, over half of all new systematic investment plans (SIPs) are initiated by individuals below the age of 35, reflecting a growing trend of early financial planning among the youth.

This burgeoning participation is reshaping the mutual fund sector, with young investors focusing on long-term wealth creation through strategic financial choices. Furthermore, data from AMFi highlights a rise in female engagement, with women accounting for 24 per cent of new SIPs, surpassing the national average of 17 per cent and marking a positive shift in women's involvement in investment strategies.

During the July-September quarter of 2024, Groww reported a spike of over 4.7 million new folios in SIPs, doubling the growth seen in the same period in 2023. Notably, these additions constituted half of the total SIP contributions across the mutual fund industry from the previous year.

SIPs are the preferred investment method on Groww, comprising 86 per cent of the platform's investment volume. The average SIP value per customer has climbed to over Rs 6,000, showcasing an increased commitment to long-term wealth building through disciplined investing practices.

Harsh Jain, Co-founder and COO of Groww, remarked, "The rising participation of younger and female investors points to a broader financialization of savings in India, as systematic, long-term investing gains popularity." He noted that the widespread adoption of UPI autopay has streamlined the payment process for investors, and Groww's educational initiative 'Ab India Karega Groww' has fostered disciplined investing habits nation-wide.

Moreover, nearly 80 per cent of Groww's transactions come from non-metro cities, indicating substantial interest in SIPs among retail investors in smaller towns. Maharashtra, Uttar Pradesh, West Bengal, Bihar, and Rajasthan were identified as the top contributing states from B30 (beyond top 30) cities, underscoring the increasing engagement from these regions.

(With inputs from agencies.)