40% Indians to invest in equities and mutual funds in 2022: Survey

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NEW DELHI :

Indian households are likely to turn to savings than spend on big-ticket discretionary items in the current year as the severity of the pandemic drives consumers to turn more judicious about their finances, according to a survey by community platform LocalCircles.

LocalCircles conducted a national study “India Consumer Spending Outlook – 2022″ to map consumer sentiment for the new year. 40% of those surveyed are likely to invest in equities and mutual funds; while 15% of families are likely to spend on major items like property, cars and jewellery in 2022.

The study sought to understand consumers’ plans to purchase residential property, vehicles, health insurance, jewellery, and equities or mutual funds in the year 2022.

LocalCircles received over 47,000 responses from households residing in 391 districts of India. 63% of these respondents were men, while 37% were women. 47% of respondents were from tier 1 cities and metros while 33% from tier 2 towns, and 20% of respondents were from tier 3, 4 and rural areas.

The survey findings reveal that 1 in 7 families is likely to spend on residential property in 2022, while 2 in 5 families are likely to prefer investments in equities or mutual funds in the current year. Of those surveyed—1 in 7 families said they are likely to spend on residential property in 2022; while 1 in 6 families is likely to spend on a 4-wheeler vehicle in 2022. Meanwhile, 1 in 7 families said they are likely to spend on gold, diamond, silver or multiple types of jewellery in 2022. 1 in 6 Indian families likely to increase their health insurance coverage in 2022, the survey said in its findings.

“While the two covid-19 waves in 2020 and 2021 impacted livelihoods and earnings for many, the economic rebound in India has been strong, especially post the second wave. This has led to a rise in optimism amongst a set of consumers believing that even if an omicron-led third wave impacts India, it will cause 1-2 months of disruption followed by revival,” it said.

Spending outlook on big-ticket items looks relatively better, said the survey.

“Demand for jewellery is also likely to be robust with 1 in 7 families likely to spend on gold, diamond, silver or multiple types of jewellery. The low-interest rates and the 25% rise in stock market indices in 2021 have led to increased confidence in equities and mutual fund investments with 2 in 5 families keen to invest in equities or mutual funds in 2022,” it added.

The appetite to save comes as the pandemic has amplified the need for financial security and medical exigencies.

“The rising cost of healthcare in India, especially in the aftermath of the two covid waves has fuelled the demand for health insurance across the country with many more realising that they need health coverage. This was validated by an increase in sales of covid-linked products and other health cover policies, industry experts estimate,” the survey findings revealed.

Meanwhile, 2 in 5 families is said they are likely to invest in equities or mutual funds in 2022. This question in the study received 9,088 responses.

The survey cited recent data by the Association of Mutual Funds in India that indicated that in the last year, towns outside the country’s top 110 cities saw their share in industry assets under management jump from 10.21% in June 2020 to 15.44% in June 2021, reflecting a 50% surge.

“With the strong performance of the stock market indices and low-interest rates on fixed deposits, many retail investors took to investing in shares and mutual funds in 2021,” it said.

As part of the survey— 10% said they would invest in equities in 2022 while 31% said they would invest in mutual funds, 4% opted for gold as a pick and said they will stick to bank fixed deposits.

Overall, 28% said they don’t have a plan to make any new investments in 2022.

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