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Indian household asset ownership has diversified over the years but the share of equities is still very low.
The equities account for only 5.8 per cent of the total assets owned by average Indian households, according to a report by Jefferies. The report data highlights that Indian households still prefer to invest in traditional investment options over equity markets. Property remains the dominant asset class for Indian households, contributing a significant 51.3 per cent share of their total assets. Gold holds the second-largest share at 15.2 per cent, followed by bank deposits, which account for 13.3 per cent of the household assets. The report also noted that Provident funds (PF) and pension schemes make up for 5.7 per cent, and cash holdings at 3 per cent. But despite the relatively low allocation to equities, there has been a noticeable increase in retail investments in the stock market through Systematic Investment Plans (SIPs). These plans allow individuals to invest a fixed portion of their monthly income into equity-linked schemes, promoting disciplined and steady investment. In October 2024, despite volatility in the Indian stock markets, SIP inflows reached an all-time high of Rs 253.2 billion. This marks a 3.3 per cent increase compared to the previous month and an impressive 49.6 per cent surge from October 2023. The steady growth in SIP contributions indicates that retail investors remain committed to equity investments, even in uncertain market conditions. The rise in SIP inflows underscores the growing financial awareness among Indian households and their willingness to explore equity markets as a wealth-building option. While traditional assets like property and gold dominate their portfolios, the increasing popularity of SIPs highlights a gradual shift towards more diversified investments. This trend suggests that, over time, equities could play a more prominent role in household wealth, particularly as financial literacy and investment options expand across the country. (ANI)
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