Evolving Investor Trends in India

The Indian investing landscape has undergone a massive transformation in recent years, with younger investors driving a surge in equity market participation. By working with 18 leading brokerages, 250+ financial institutions in all, smallcase has enabled seamless access to diversified portfolios for millions of investors.

Here are some insights on how smallcase is shaping investment behaviour and evolving alongside the preferences of different investor demographics.

The Rise of Young Investors & Their Preferred Strategies

India has seen a sharp rise in young investors (under 35) entering the equity market, largely driven by the ease of access provided by digital brokerage platforms. These investors prefer ETF-based asset allocation portfolios and dividend strategies as their starting point. Over time, they diversify their holdings with thematic and sectoral smallcases such as:

Green Energy
Electric Mobility
Rising Rural Demand
Banking & Infrastructure Trackers

On the other hand, older investors (over 35) tend to favor more traditional strategies focused on fundamentals, growth, and quality.

Investment Horizon: Buy, Hold & SIP

Despite the difference in investment strategies, both young and old investors share a common approach when it comes to holding periods. Over 90% of smallcase investors hold their portfolios for more than two years, emphasizing a long-term wealth creation mindset.

ETF & Multi-Cap vs. Large-Cap Investing

Investment choices are influenced by various factors such as risk tolerance, financial goals, and investment duration. Younger investors, aiming for high-growth opportunities, lean towards ETFs and multi-cap smallcases for their diversification benefits. Meanwhile, older investors prefer the stability of large-cap stocks, which often provide consistent returns and income generation.

SIP vs. Lumpsum: The Preferred Approach

A significant trend among younger investors is the preference for Systematic Investment Plans (SIPs) over lumpsum investments. According to smallcase data, 60% of investors under 35 opt for SIPs in asset allocation smallcases. Some of the most popular smallcases for SIPs include:

All Weather Investing
Equity and Gold
Green Energy
Value and Momentum
Top 100 Stocks

Kavya Natarajan

Storyteller at smallcase ---- The content in this article is purely the author’s personal opinion and is for informational and educational purposes only. It should not be construed as professional financial advice and nor to be construed as an offer to buy /sell or the solicitation of an offer to buy / sell any security or financial products. The views and opinions stated in the content belong to the author. Smallcase Technologies Private Limited does not uphold nor promote any of the views / opinions.

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Evolving Investor Trends in India