Indian investors have earned more from investing in equities than returns from property and gold. Equity investments have given highest returns in any 5 year period between last 1 year to 25 years.
According to a study by American financial services company Morgan Stanley, the 5-year, 10-year, 15-year, 20-year and 25-year returns from Indian equities (BSE Sensex) are better than real estate, gold, 10-year Treasuries and banks. Fixed Deposit (FD) is better than other asset classes.
According to the report, equities have given 15% compound annual pre-tax return (CAGR) over a period of 25 years. At the same time, gold has returned 11.1%, bank FDs 7.3% and property or real estate 7% in seven major cities of the country.
The findings of the Morgan Stanley report:
- Indian families have earned around 84 lakh crore rupees from the stock market in 10 years. For this he invested only 3%.
- In a decade, the wealth of Indian families has increased by about 717 lakh crore rupees. About 11% of that came from equities.
- Indian families, including founders of new companies, have earned 819 lakh crore rupees in 10 years.
- The share of income from equity shares is around Rs. 1 lakh crore ie 20%. That means the promoters also spent about Rs. Earned 84 lakh crores.
- Equity investors faced a high volatility of 30.7% to get this return. While gold fluctuated by 11.3% and bank FDs by 1.6%.
Indians invest 3% in equity, soon 10%
Ridham Desai, economist at Morgan Stanley, said in the report, 'We believe that Indian households are still underinvesting in equities. In the coming year, their investment in equities may cross the 10% mark, from just 3% at present.
The share of retail investors grew by 8% in 10 years
According to the report, the share of retail investors in Indian stocks has increased by 8% to 23.4% in the last 10 years. This share was 15.7% in 2013 and 20% in 2018. In line with this trend, the common Indian's share in the stock market has grown exponentially in recent years.
The security transaction tax has reached 36 thousand crore rupees
Due to the increase in market transactions, the Security Transaction Tax (STT) collection in the country has reached Rs 36 thousand crore between April and November. This is 97% of the budget target. STT on futures and options trading has been increased to 0.02% and 0.1% from October.
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