'Millennials step up SIP game, opt for higher risk funds in 2021'

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In 2021, millennial investors have taken more risks and adopted a more disciplined approach to investing in mutual funds, shows Paytm Money Annual Report 2021.

According to the report, which is based on transactions executed on the Paytm Money app, average SIP transactions per user went up 30% last year. Also, the average SIP amount was higher by 16%.

The platform witnessed increased demand for smallcap funds among millennials. “42% of millennials invested in small-cap funds in 2021 up from 31% in 2020. Among the 10 most traded mutual funds on Paytm Money, 3 belonged to the small-cap category while 1 belonged to the mid-cap category,” the report stated.

Apart from smallcap funds, the platform recorded heightened interest of millennial investors in ELSS funds and NPS.

“Average investment in these funds (ELSS) rose by 23%. Proportion of millennials investing in ELSS funds also increased from 26% in 2020 to 31%. Given these funds are tax saving instruments with a 3-year lock-in period, the above numbers point towards a mature approach towards investing,” the report said.

In case of NPS, the number of millennials investing through the platform doubled in 2021.

“Overall, 2021 was the year that saw India’s millennial investors evolve significantly. These users are now investing for the long-term, diversifying their portfolio, and also having a higher risk-appetite,” the report concluded.