Increasing number of youngsters directly investing in equities: Survey

An increasing number of youngsters are directly investing savings in equities, indicating that their focus is long-term returns and not immediate tax savings, according to a survey.

It can be noted that brokerages like Zerodha, Upstox and AngelOne, and traditional players like HDFC Securities, ICICI Securties, Geojit etc more than doubled their new customers since the pandemic.

And all these brokerages say that over 70 per cent of their new customers are first-time investors and are under 30 years. Between May 2020 and September 2021, the user base of BSE nearly doubled to over 80 million, of which the last 10 million were on-boarded only between the first week of June 2021 and the third week of September.

The online survey was conducted last week among 2 lakh people in the 18-50 age bracket.

According to the survey carried out by an online investment platform Groww (backed by Sequoia Capital, YCombinator, Ribbit Capital, Tiger Global etc), as much as 81 per cent of the survey respondents are investing their money into stock markets followed by mutual funds, and they stay focused on savings and long-term money growth, not the immediate tax savings.

Surprisingly, tax savings doesn't influence investment decisions at all, with only 3 per cent of investors considering moving their investments in the tax-savings asset class options.

The survey attributed the key findings to the increased financial literacy coupled with the pandemic, which has led to a steep rise in the investor community, especially among the youngsters.

Nearly 76 per cent of the respondents are first-time investors, and of them, 69 per cent have been investing for less than a year. Investors who've been in the market for over five years account for just 5.7 per cent.

Of the total survey respondents, those in the 18-24 age bracket and those in the 25-30 age group lead the chart as first-time investors, with 39 per cent and 34 per cent, respectively.

Those in the 18-24 and 25-30 age groups are the largest investors in the stock, with 24 per cent of the respondents in each group saying so, and 14 per cent of the former and 17 per cent of the latter parking a portion of their surplus funds in mutual funds and just 1 per cent in fixed deposits and 2 per cent in US stocks.

As against this, only 22 per cent in the 31-40 age-bracket invest in stocks, and the number is 15 per cent for MFs, 2 per cent in fixed deposits and 3 per cent in US stocks, and the numbers for those above the 40-age bracket it 17, 12, 0, and 1 per cent, respectively, the survey said, adding overall, among investors, stocks and mutual funds top the charts at 87 per cent and 58 per cent, respectively.

Among other investments like investing for creating long-term wealth, general savings, home buying, education, retirement planning, marriage and rax savings, also the youngsters lead and they are influenced investing to create long-term wealth and general savings.

The survey also finds that retirement planning is one of the top investment priorities for those in the 40-plus age bracket.

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