Amid crisis: A sharp rise in demat account indicates shifting to equity

Amid crisis situation investors are discovering new options to invest their money where returns are better. Fixed income instruments are now giving them declining interest rates because of the latest cases of defaults that have impacted that mutual funds. Now, the investors are looking to expand their portfolio risk.

Amid crisis: The correction in the market has given an opportunity to the retail investors to enter at discounted levels especially in several bluechip firms. And also,shifting of all the business operations from conventional offices to work from home due to the coronavirus induced lockdown, has given a good part of the working population some extra time to read, learn and enter into the financial markets. All of this has excited the population to participate leading to to discount brokers seeing a surge in opening of demat accounts.

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Amid crisis: Over the time, retail investors have grown and now they understand the markets and economy better. Thus, this gives birth to a rising interest level in capital markets. In the last 3 years sensex has been delivering 16% CAGR in comparison to fixed deposits or income instruments where yields have declined. This can be seen from the rising interests in equities and mutual funds over the last couple of years. Trading volumes have also been increased since the last week of March. Cash volumes jumped up by nearly 25%. F&O contract volumes have increased by 10%.

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