More than two-thirds of investors in the stock market are unable to match the returns of the benchmark index while 65 percent of the market participants were unaware of their exact stock market returns, reported market daily Business Standard, quoting a survey done by Nielsen, commissioned by Samco Securities.
The report found that 63 percent of the investors don’t even target or have any plans to beat the indices, a comparison that is otherwise prevalent when choosing an active fund, it said.
“Our estimate is that retail investors are underperforming by 4-5 percent annually to the benchmark indices,” Jimeet Modi, group chief executive officer (CEO), Samco, was quoted as saying.
The survey done across ten major cities pan India covering investors and traders in the age group 24-45 years found that only 25 percent of the respondents were able to beat returns generated by fixed deposits, noted the report.
Earlier, the Securities and Exchange Board of India (Sebi) had released a study showing the widespread losses by individual investors in the futures and options (F&O) segment, informed BS, adding that the study showed that 9 out of 10 traders incurred losses in fiscal 2021-2022.
Further, the report depicted the disparity amongst the F&O traders as the top 5 percent of the traders accounted for 75 percent of the total profits, it said.
“Through an analysis of Sebi study, we find that even though returns on Nifty50 remained at around 18.8 percent in FY22, much higher than the 14 percent in FY19, the average profit made by the investors in F&O declined by more than half,” Modi told BS.
However, the report pointed out that efforts from investors to match returns from benchmark indices have brought a significant inflow in passive funds. Mutual fund data for the month of February by the Association of Mutual Funds in India (Amfi) showed an inflow of ₹6,244 crore in index funds. In January, it stood at ₹5,813 crore.
