Investment habits in India have undergone a significant transformation, driven by increasing financial literacy, rapid digitalisation, the rise of fintech platforms, and the proactive role of distributors. A recent AMFI-Crisil report highlights how investment preferences shift across different age groups, reflecting the evolving risk appetite of investors.
The report indicates that younger investors tend to favour equity mutual funds, while older investors show a stronger inclination towards debt and hybrid funds. As individuals age, their investment approach becomes more conservative, prioritising stability over high returns.
Let us explore how different mutual fund categories attract investors based on their age.
Debt mutual funds are preferred primarily by investors aged above 58, with 48.9% of this group opting for them. These funds offer lower volatility and steady returns, making them an attractive choice for individuals nearing or in retirement.
The popularity of debt funds among older investors reflects their desire for stable income and reduced exposure to market fluctuations.
Equity mutual funds, known for their potential to generate higher long-term returns, are preferred by younger investors who have a longer investment horizon and higher risk tolerance.
Despite the shift towards conservative investments with age, a notable proportion of investors above 58 still prefer equity funds, indicating a mix of risk-taking and strategic asset allocation among experienced investors.
Hybrid mutual funds, which combine elements of equity and debt, appeal to investors looking for a balanced investment approach. These funds allow for a mix of capital appreciation and risk management.
The increasing preference for hybrid funds among older investors highlights their desire for stability with some exposure to growth-oriented assets.
Index funds, which follow a passive investment strategy by tracking benchmark indices, have gained traction among investors of all age groups. Their low cost and simplicity make them an attractive option for both experienced and new investors.
The consistency and diversification offered by index funds explain their rising popularity across different investor segments.
The AMFI-Crisil report underscores a clear trend—investment preferences shift towards conservative options as investors age. While young investors prioritise equity funds for growth, those approaching retirement gravitate towards debt and hybrid funds for stability.
Understanding these patterns can help investors align their portfolios with their financial goals and risk appetite at different stages of life.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Mar 4, 2025, 2:56 PM IST
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