Groww, one of country's investment platform, claims to have seen 100 percent week over week growth in transacting users since the launch of stock investing on its platform.
"We have seen over 1 lakh active investors," says Harsh Jain, co-founder and COO, Groww.
Stock investing was launched in the month of June on Groww's platform.
The pandemic induced lockdown, Jain adds, has given more time to people to research deeply about the stocks and mutual funds.
"There is a segment of people whose earnings have remained unaffected yet savings have increased as spendings on travel, restaurants, cinema, luxury purchases, etc have gone down. This segment is investing a lot more than they were doing earlier," he opines.
Among the new investors, 40 percent of them are seen parking money in mutual funds (MFs), while the rest invest in direct equities.
"Mutual funds are a preferred option for many first time investors, largely due to the diversification it offers as well as it being professionally managed by fund managers. Investing in direct equity, on the other hand, allows investors a greater degree of freedom in creating their own portfolios," Harsh says.
"Mutual funds have become a go-to product for long term wealth creation. New age platforms offering easy investment options and investment resources have also done their fair share in demystifying mutual funds," he adds.
On fund selection, Jain says that investors have an inclination towards large cap stocks from banking and financial services, FMCG and telecommunication services.
Top cities from where stock investors on Groww hail from Pune, Hyderabad, New Delhi and Bengaluru.
However, until recently investing in direct equity was a cumbersome process. Right from opening a demat account to onboarding, the entire experience was dampened by complex paperwork and longer wait times. Moreover, the necessary resources an investor may require to conduct in-depth stock research, such as information about the company’s financials, peer comparison, share holding pattern etc. was not consolidated.
“With faster, paperless onboarding along with educational and decision aiding resources, offered by platforms, more retail investors are expected to take interest in direct equity investments and the trend is only going to move upward,” Jain opines.
As an investment option, both mutual funds and directly have their pros and cons. The efficacy of both, however, depends on the type of investor and their investment needs.
“Investors accordingly find the right combination of investment avenues to ensure that the financial goals are met with minimal exposure to risks,” Jain opines.
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