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Millennials are far more aware and well-read when it comes to financial knowledge. But still many millennials aren’t familiar with ETFs, believes Varun Sridhar, CEO, Paytm Money. He was speaking at the Cafemutual Passives Conference 2023 in Mumbai.
Varun shares with us that 40% of the total client base of Paytm Money have invested in passive funds largely through ETFs. He feels that the Indian mutual fund industry can attract millennials through ETFs as these products are cost efficient, transparent and simple to understand.
Varun gave some powerful tips to the MF industry to attract millennials through ETFs. Let us look at them:
Tell the ETF story
Investors likes to be informed so the simplest way is to educate investors through easy to consume content like short articles and infographics.
Gifting of ETFs can go a long way
The MF industry should look at allowing ETFs for gifting purposes. In India, many people give precious gifts like electronics gadgets, utensils, jewelry and so on. Instead, they should be allowed to give wealth generating goods like ETFs. Millennials will appreciate this innovative gifting and they may like to accumulate more units.
Simple execution
Millennials like to do thing swiftly. They may not be patient when the process is too complicated. Currently, buying or selling an ETFs is complicated. You need to do KYC, open a demat account and shortlist a good ETF. Also, selling is more difficult as liquidity is a challenge here. The industry should focus on removing these hurdles and make ETFs more liquid.
Sell SIP based ETF
The industry needs a ‘SIP like moment’ to make ETFs popular among millennials. They should be allowed to do SIPs in ETFs to make it more lucrative for millennials.
Using regional language for more accessibility
You need to speak in the language of millennials to make ETFs popular among them. Currently, all our communication is in English. However, many millennials are comfortable in Hinglish (a mix of Hindi and English) and mix of regional language with English and Hindi. So, we need to rethink our communication strategy to attract more millennials.
