Significant percentage of young adults prefer to invest in stocks directly rather than MFs: Report

New Delhi: Significant percentage of young adults are increasingly preferring to directly invest in equity markets rather than opting for the mutual fund route, a report has said.

According to the report by Fin One, an initiative of fintech brokerage firm Angel One, 93 per cent of young adults are consistent savers, with the majority saving 20-30 per cent of their monthly income.

Additionally, stocks have emerged as the preferred investment choice, with 45 per cent of respondents favoring them over more traditional options such as fixed deposits or gold, Fin One, an initiative of Angel One Ltd, said in its report.

As much as 58 per cent of young Indian investors currently invest in stocks, while 39 per cent favor mutual funds.

Safer options like fixed deposits (22 per cent) and recurring deposits (26 per cent) see relatively lower adoption, the brokerage firm said in its report.

This indicates a balanced approach between high returns and stable savings among the youth, it said.

The report draws data from 1,600 young Indians in more than 13 Indian cities, benchmarking four key areas of saving behavior, investment preferences, financial literacy and the use of technology and financial tools.

It underlined the role of digital platforms and technology with 68 per cent of respondents regularly using automated savings tools, underscoring the growing impact of fintech on the financial habits of India's younger generation.

Despite disciplined saving habits, 85 per cent of young Indians cite the high cost of living -- particularly food, utilities and transportation -- as the most significant barrier to saving, it said.

This indicates rising living costs are a critical challenge for India's youth, it added.