In an interaction with Finance Outlook India, Praveen Subramanya, Managing Director of IACVS – India Chapter and Director at Wyz Appraisers Pvt Ltd., shares insights on how India's young investors are reshaping the mutual fund landscape through digital adoption, informed decision-making, and goal-oriented investing strategies that prioritize long-term wealth creation over traditional savings instruments.

Praveen is a distinguished valuation expert and financial professional with over 23 years of extensive experience spanning real estate, business valuation, and credit risk management. He is a Member of RICS, UK (Ex Global Governing Council Member), a Chartered Engineer, Registered Valuer, and Certified Business Valuation Specialist (IACVS) USA. At IACVS – India Chapter, Praveen leads strategic initiatives while also serving as Director at Wyz Appraisers Pvt Ltd., Registered Valuers. His illustrious career includes senior leadership roles at Knight Frank (India) as Director – Valuations and Advisory, Head of Risk at Edelweiss Capital, and Head – Technical (Valuations) at IIFL Group, where he managed portfolios exceeding $3 billion. He has been part of expert working groups on Valuation Standards and ESG at RICS, UK, and has contributed to guidelines for valuations with IBBI, Government of India.

How are demographic shifts and rising financial awareness among India's youth driving demand for mutual funds over traditional saving instruments like fixed deposits and gold?

The market has transformed significantly over the last decade. Young Indians are no longer just saving—they're actively investing. Compared to fixed deposits and physical gold, there's a clear edge toward equity-side investments through mutual funds and direct equity. Young investors feel these options are more aligned with their financial goals, and there's abundant information available about long-term wealth creation through equity and mutual funds.

While gold has delivered over 100% returns in the past year and maintains its appeal as both a hedge and status symbol, it doesn't produce regular income. Fixed deposits barely meet inflation, making them less attractive. Mutual funds occupy the sweet spot—they can compound wealth over time and are fairly easy to start with.

The preference is particularly strong for equity-based mutual funds accessed through the SIP route, which is easier to manage and allows investors to start with small amounts. From lower to higher income ranges, everyone can participate. Young Indian investors have witnessed tremendous market returns over the last five years, reinforcing their preference for mutual funds as vehicles for long-term wealth creation. The disposable income advantage, combined with readily available information across multiple AMCs and fund options, has made mutual funds the preferred choice over FDs and gold for India's youth.

What role are digital platforms (mobile apps, robo-advisors, and online dashboards) playing in reshaping how young Indians discover, invest in, and manage mutual funds?

Everything has changed in the last five years because we're more dependent on our phones, and investing has become part of that mobile-first lifestyle. Numerous mobile apps, robo-advisors, platforms with clean dashboards, and research tools are now available. Starting an SIP, tracking returns, and rebalancing portfolios—all of this is super easy now, available at one click.

Even small mutual fund distributors are coming up with innovative mobile apps. There's no paperwork at all. Service-related tasks like updating contact details or email addresses are entirely online. Digital platforms offer young, tech-savvy investors—who use phones more than anything else—the ability to compare funds, access comprehensive data, conduct their own research, and receive robo-advisory services seamlessly.

These apps provide notifications and simple visuals to keep people engaged, along with motivational stories that encourage investment. Since our lives now revolve around phones and laptops, investment has naturally become part of that digital ecosystem. People can instantly invest through UPI within seconds of having funds available.

Digital platforms are giving young investors the edge, making mutual funds feel easy to access with the flexibility to withdraw anytime. For rebalancing purposes, these apps provide all necessary options. The digital platform's role will be crucial in doubling the industry's size over the next five years. It has already built this industry to current levels and will continue to play an even larger role going forward.

How does the evolving risk appetite and longer investment horizon of millennials and Gen-Z influence the types of mutual fund schemes they prefer?

Young investors generally have more time to stay invested and recover from market dips. Nowadays, they're reading extensively and receiving substantial information through digital platforms, making them very comfortable with measuring risk for higher returns. They're investing for the long term, which translates into a preference for equity-oriented schemes. They understand that longer duration equity investments will deliver better returns.

What's changed significantly is the response to market volatility. Earlier, whenever the market fell, everyone panicked and withdrew money. Now, young investors understand the market better and actually buy more during volatility. For longer-duration choices, they're taking large-cap funds for stability, flexi-cap or mid-cap for growth, and for aggressive calls over the last 2-3 years, they're taking sector-specific or thematic positions.

Defence emerged as a new sector attracting many new investors in the last 2-3 years, delivering tremendous returns. Young investors are now chasing these kinds of trends—looking for themes or specific sectors like energy, which is currently seeing significant interest. The key is the time horizon. For 5-10 years, equity is preferred. For short-term horizons, we recommend hybrid funds to new or young investors. If the horizon is less than 1-2 years, debt funds or liquid funds are the right choice.

Typically, a young investor's portfolio is equity-heavy, SIP-driven, but more or less diversified and flexible for long-term growth. They're understanding risk appetite and investing through segments that match their risk tolerance and time horizon. The longer the time horizon, the more aggressive their positioning—favoring mid-cap or small-cap funds.

In what ways are peer influence and social media — including influencer recommendations and community-based investing discussions — contributing to the spread of mutual fund adoption among young retail investors in India?

Peer groups, influencers, and community chats are huge these days. People learn about funds from friends, constantly discussing reels, tweets, and sharing information about market milestones or developments. There are definitely reels providing accurate information, though some don't—that's a separate issue—but they're creating significant buzz. New investors especially trust these options, and the impact is substantial.

Sometimes these social media sources are faster than traditional advisors. We've seen instances where investors are working with an advisor but, after watching a reel or reading tweets, will ask their advisor whether they should invest in a particular opportunity. This shows the real impact. Influencers are helping investors demystify investment jargons and sharing simple to model portfolios that push them to make investing a habit.

Community forums and groups are creating momentum. People share screenshots, call out good funds, and celebrate milestones—their first lakh, their first SIP. Social media is definitely helping create buzz around investing among young generations. The role of social media is very important. Investing is becoming normalized due to this social media impact.

Because people spend significant time on phones using social media, they encounter abundant investment-related news, reels, and tweets. It's creating a movement. The social media impact is definitely visible. However, we must be conscious—there's information available, but knowing whom to rely on is also an important part of navigating this landscape.

How are regulatory changes (e.g., simplified KYC procedures, mandatory disclosures, easier systematic investment plan options) enabling better access to mutual funds for first-time investors?

Regulators have done an excellent job simplifying the KYC process, which is now Aadhaar-based with online KYC available without any documentation—very easy to complete. Aadhaar is becoming a core part of this KYC process, making investment very easy. The standardized disclosures and simple formats they've mandated are also positive developments.

Instant e-KYC, e-signing, and onboarding have eliminated what was once the first barrier for new investors. Product labeling is now helping young or new investors understand risk better. These regulations serve the interests of new investors, making fund comparison easier with simple, accessible information. This plays a good role in investment decision-making.

The SIP convenience features they've introduced—auto debit, mandatory setup, NAV visibility—are very positive for first-timers. These changes reduce paperwork and speed up onboarding significantly. Mutual funds are now accessible to everyone in tier-2 and tier-3 cities, with everyone investing in mutual funds with smaller amounts.

Thanks to these regulations making access easier, a first-time investor can complete the entire process and invest within 15 to 20 minutes. This is the impact of regulations that have made accessing mutual fund investments very easy.

Also Read: Wealth Creation in Your 30s: Why Mutual Funds May Beat All Other Options

What future trends, such as tokenized funds, fractional investing, AI-driven personalized portfolios, or ESG/thematic fund popularity could shape how young Indians invest. Also, tell us how mutual fund distribution adapts over the next 5 to 10 years?

The next 5 to 10 years will see significant movement toward fractional investing and AI-driven approaches. In terms of fractional investing, smaller ticket sizes or fractional ownership of high-value assets—and potentially blockchain-based tokens—could make exotic strategies accessible. These are options that normal young investors want but currently lack sufficient information about. However, these are becoming available, and many funds are introducing such options for the future.

AI-driven portfolio suggestions, rebalancing, and importantly, tax-loss harvesting are helping significantly with individual cash flow and goal-based investing. AI provides substantial information autonomously or through notifications. Investors are increasingly conducting investment and rebalancing themselves. This is a very helpful tool, and young India wants exactly this.

Young investors are investing with purpose. Over the last 2-3 years, we've seen them investing in thematic areas. Earlier they invested in defence, but now thematic and ESG investments—focusing on environment, social, and governance—are attracting interest. They want to invest through companies offering better options in these areas, like clean energy, AI-based funds, and tech-related funds with AI components.

Micro-savings are also helping them significantly. Many options now allow them to pledge their mutual funds or equity to obtain funds and invest or use them rather than redeeming. For short-term fund requirements, they can pledge these assets, take micro-savings assistance, fulfill their commitments, and then re-enter the market. Much of the inflow and outflow is managed through micro-savings.

Distribution is shifting mostly toward apps and platforms with different tech flows. Traditional distributors will survive but are evolving with advisory specialists and enabling themselves with tech platforms. We're seeing significant demand for AI capabilities where investors can ask questions and easily get information.

Future trends point toward AI-driven personalization, thematic or sectoral investing, and tokenized funds that will become a significant part of their portfolios.

As a young investor entering the mutual fund market today, what advice would you give to build a disciplined, long-term, goals-based savings and investment habit rather than chasing short-term gains?

We recommend starting now, whether with small or large amounts—just start now. Even a 500-rupee monthly SIP is valuable; it builds the habit. SIP plus time horizon will definitely help build wealth in the long term.

We suggest goal-based investing—relating investments to specific goals. This helps investors save for longer durations and easily achieve their financial goals, whether it's an emergency fund, contingency planning, house purchase, retirement, overseas vacations, or anything else. Young investors are now planning for expensive phones and gadgets—if they want to buy an expensive phone in two years, they can start an SIP now.

We recommend relating investments to goals; it definitely helps. Diversify the portfolio, but don't rely on all available information—do your own research too. The portfolio should be diversified with 2 to 4 core funds like large-cap, mid and small-cap, and flexi-cap. Don't chase everything; every portfolio and every investor is unique. Diversify but keep it simple.

Another crucial suggestion is to ignore the noise. There's abundant noise, information, and buzz, sometimes with unnecessary headlines created around market falls or all-time highs. Just stay invested and follow your goals so these disturbances don't disrupt your long-term portfolio. Switches based on this information often lead to unnecessary changes that aren't required.

We also advise learning the basics. At least understand fundamental aspects of investments, mutual funds, expense ratios, turnover, and details about the funds you're investing in. Understanding basics is essential.

Lastly, we strongly suggest controlling emotions. Don't run for returns only—returns are just part of the portfolio. Volatility is normal for portfolios. When the market dips and opportunities arise, invest and follow a disciplined way of investing. SIP is part of that discipline. Following financial goals and maintaining the appropriate time horizon enables building long-term wealth as planned. Long-term investing helps achieve all financial goals.