The A, B, C of New-Age investments

A lot of people have gone public in the past two years. They are passionate, more knowledgeable and they want a lot more. “Have money, buy†seems to be their mantra, along with a seemingly insatiable appetite for investing in the markets.

While there is no data on the exact age profile of these investors, anecdotal evidence suggests they are under 35, smart, tech-savvy, and keen to learn the tricks of the trade from all those who have the patience to answer. their questions.

CNBC-TV18 conducted a survey that received nearly 1,200 responses – the first was to quantify the age profile of investors: 8 in 10 respondents were under 40 and nearly one in two were under 30 .

While a large portion of respondents have been active market participants for more than 5 years, 4 in 10 have only entered the market in the past 2 years.

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Upstox, a fintech broker, claims that seven in 10 of its more than 4 million customers are first-time investors and are under 36. It added more than 2 million customers in fiscal year 21. Almost 80 percent of them were in the 18-36 age bracket. Zerodha says that the average age of its users is between 25 and 35 years old. Take the case of Paytm money as well – 80% of investors on the platform are under 35. Look at Smallcase, the number is even smaller, the average age of investors using Smallcase is only 28.

Savvy retail investors don’t just invest in mutual funds (MFs) or exchange-traded funds (ETFs), they hand-select individual stocks and get into cryptos as well.

Over 40% of those surveyed received their investment ideas and insights from social media. Several also said they do their own research and most invest more than a third of their income. They are also there for the long term, 74% of them said they are investing for long term returns.

However, a fifth of respondents also entered the market because it is easier to invest and they had a little extra cash on hand during the pandemic. They have also recently learned to invest.

These new investors are not just coming from the usual Maharashtra or Gujarat. Internet penetration and accessibility of information mean that investors across the country are now participating in the markets. States like Assam, previously little active in trade, have added more than 7 lakhs of investors in the past year, which represents a 200% increase in the number of active traders.

Madhya Pradesh (MP), Uttar Pradesh (UP) and Bihar – all saw between 60 and 90 percent an increase in the number of active traders.

More than half of those surveyed said they use apps like Zerodha, Groww, 5paise, etc., compared to traditional bank brokers like Kotak, HDFC or ICICI, etc. As a result, access to financial markets has become easier, cheaper and more technology-driven. Seven in ten investors use discount brokers and UPI apps to make their money grow.

Today the options have increased and investing is much easier than before. The institutions of Mumbai are losing their stronghold to the benefit of technicians from Bengaluru. So the space that was previously dominated by ICICI, HDFC, and IIFL, is now the playground for Zerodha, Groww, and Upstox. The list continues to grow.

Zerodha, with half the experience of Angel Broking for example, now holds the largest 19% market share, with nearly one in five people trading with Zerodha. Then, 5paisa.com, 5 years old, has a market share of 5%, which is more than the share of established players like Kotak or Motilal, etc.

As far as execution is concerned, there is Zerodha, Upstox, and Groww, they would allow you to buy or sell on their apps. Then there is a whole slew of other apps, which provide both research – what stock should you buy, what their analysts say – then you can buy on their apps, so research more execution – ICICI Direct or Edelweiss or Kotak Securities or IIFL. If you just want a research-only app, there’s moneycontrol and StockEdge.

If you want a great app that will take care of stock execution, research, insurance, MFs, payments, loans, you have Paytm and there are more apps coming to this. space. If thematic investing is the way to go, go with Smallcase or Fyers. For all non-equity investments that are – crypto, debt funds, digital commodities, overseas investments – you have Wazirx.

With all of these options on the table, how do you select the best option? Prakarsh Gagdani, CEO of 5paisa.com and Vijay Chandok, MD and CEO of ICICI Securities, discussed what works and what doesn’t in new and old tools of commerce.

“Two and a half years ago when discount brokerage was starting to take hold, that was when price was the selling point because we were coming to a fixed fee and then the big brokers in place. were coming up with a brokerage percentage on the value of the trade, â€Gagdani said.

“Over a period of time that is now negligible. Everyone is almost at the same level as the pricing. It’s more in terms of ease of use, ease of opening a demat account, that may seem to us. very easy but that’s an important thing, that you are able to access capital market information in your own language, it goes far beyond pricing. â€

“Prices have become commonplace, everyone has converged on prices. What sets it apart is the experience, if you are able to meet a client’s goals of coming to market, which is wealth creation. So the whole game is now removed from pricing, â€Chandok said.

Smallcase allows thematic investing.

“Smallcase are basically baskets of stocks or ETFs that reflect a certain idea, strategy or goal. These are all portfolios that are managed by licensed professionals. A small suitcase is like an action playlist. So as the industry as a whole works harder to provide better access and offer distribution of investment products, we are on the layer that enables the creation and development of the construction of these investment products. ‘investing so that new investors looking to invest in stocks can start with a much more diversified and professional management instead of having to build their own portfolio of stocks themselves, â€said Vasanth Kamath, Founder and CEO by Smallcase.

For the entire show, watch the accompanying video.