The report focuses on the transformative power of fractionalisation, a 150-year-old investing concept re-imagined for the digital age
Ayush Mishra New Delhi
Millennials are significantly shifting in the new investment landscape, embracing fractional investing as a new-age investment instrument to diversify their portfolios. According to a recent report by Grip Invest, a digital investment platform, millennials dominate 60 per cent of the investor base into fractional investments, showcasing a growing interest in alternative assets and a willingness to explore new avenues for financial growth. This trend reflects a generational move towards fractional asset ownership, allowing individuals to own a fraction or share of high-value assets.
Fractional investing: Some key advantages
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Some key advantages of fractional investing:
Access to high-value assets with lower capital requirements.
Diversification with smaller investments.
Potential for stable rental income and appreciation in real estate.
Ability to invest regularly with dollar cost averaging.
What does the report say?
The report, titled ‘Gripping the Boom: Millennials in Fractional Investing,’ sheds light on the transformative power of fractionalisation, a concept that has enabled retail participation in sectors like private equity, art, and collectibles, introducing new asset classes to investors. Notably, the report highlights that 60 per cent of all orders on the Grip Invest platform are from investors under the age of 40, with individuals as young as 21 opting for fractional ownership of high-yield assets. This demonstrates a strong inclination among young investors to engage actively in managing their investments, with 77 per cent of users preferring a hands-on approach based on personal research.
Millennials, born between 1981 and 1996, approach investing with a blend of caution and curiosity, showcasing a willingness to explore alternative investment options in a risk-adjusted manner. Despite their cautious approach, the average investment value per investor on Grip Invest’s platform exceeds Rs 1,00,000, indicating a significant commitment to exploring fractional investing as a viable financial strategy. This shift in investment behaviour is further emphasised by the fact that 20 per cent of investments on the platform are made by Generation X, highlighting a broader demographic interest in fractional investing beyond millennials.
Nikhil Aggarwal, CEO and Founder of Grip Invest, said “Our report reveals a fascinating shift – Millennials are embracing alternative investments due to fractionalisation and market volatility. Grip Invest reflects this, experiencing 20 per cent month-on-month growth on the platform. A considerable strata of retail investors are opting for fractionalisation, due to Sebi reducing ticket sizes by 90 per cent and enhanced digital access.”
Why are millennials opting for fractional investment?
Over the past two years, the alternative investment space has witnessed a surge in interest, attracting early adopters and gaining mainstream traction, largely driven by millennials opting for a more risk-adjusted investment strategy compared to traditional risk-averse approaches. This shift in investment preferences is attributed to factors such as market volatility and the democratisation of access to alternative investment options, facilitated by regulatory reforms like SEBI reducing ticket sizes by 90 per cent and enhancing digital access.
At present, Grip Invest has more than 26,000 investors, who have used the platform at least once.