Uptick in MF investments due to rise in investment-related content on social media: Report

An uptick in MF investments: The influence of social media has emerged as a potent force in spreading awareness about the benefits of MF investments among the masses. There's a clear correlation between the uptick in MF investments and the widespread availability of investment-related content on social platforms. With the internet becoming more accessible, thanks to the rise in broadband and 4G device adoption, social media's reach has expanded manifolds, the report by Edelweiss Asset Management said on Friday. 

India's Mutual Fund (MF) industry has achieved a significant milestone, surpassing Rs 50 lakh crore in Assets Under Management (AUM) by December 2023. This growth story is underpinned by the increasing inclination of retail investors towards participating in India's economic trajectory through the capital markets. Yet, what's driving this surge in investor interest deserves a closer look. The number of social media subscribers ballooned from just over 40 crore in 2017 to a staggering 83 crore by 2022, fueling a digital revolution in investment decision-making.

“GenZ and millennials who account for 50 per cent of new to-industry investors spend 70 per cent of their time on social channels. Finfluencers are getting bigger than we estimated, whether we like it or not. And so as in many other industries, content and social media are a massive opportunity to touch the consumer. But more than any other industry, it needs to be the right content in a responsible way,” Radhika Gupta, MD & CEO, of Edelweiss Mutual Fund, said on Linkedin. 

Social Media 

Investors, now more than ever, are turning to social media channels, particularly influencers, for guidance on where to park their funds. Research indicates that social media ranks as the fifth most influential source of investment information for individuals. The ascent of 'finfluencers'—individuals offering financial advice on platforms like YouTube—has further catalysed this trend. Interestingly, individual influencers hold sway over institutional channels, highlighting a paradigm shift in investor behaviour towards personalised and relatable content.

Systematic Investment Plans (SIPs) have emerged as a dominant theme, mirroring investors' search preferences. The meteoric rise in SIP investments, from approximately Rs 3,000 crore per month in April 2017 to over Rs 9,000 crore per month in 2023, highlights the growing popularity of this investment avenue.

MF’s share in household investments

Considering the stunning growth trajectory of the MF industry, the MF industry's share of household investments in India remains relatively modest compared to global benchmarks. With the industry's size representing just 17 per cent of the country's GDP, there exists substantial room for expansion. 

Traditionally, investor outreach initiatives have revolved around one-on-one interactions and verbose articles. Social media platforms such as Twitter, Instagram, and YouTube have emerged as indispensable sources of investment-related information for today's discerning investors.