How is Gen Z Investing?

Generation Z (or simply Gen Z) is the demographic cohort succeeding Millennials and preceding Generation Alpha. Researchers and popular media use the mid-to-late 1990s as starting birth years and the early 2010s as ending birth years. So why is it important to understand this generation's investing trends? The Gen Z Generation forms a large part of the population and therefore it is important to understand their financial psychology. Their perception and expectation of different experiences paves the way for demand for these products. 

Timing is another important reason for focusing on this generation. In times of rapid change in technology and business environments, the priorities and set of expectations of Gen Z are therefore vastly different from the previous generations.

Gen Z, now approaching and entering its early 20s, is forming its own set of priorities and features, different in some instances from those of its millennial counterparts, although in nuanced ways. Here is what seems to be Gen Z's most important money priorities so far, as well as the resulting trends that should be considered by the financial services industry as it evolves to meet the demands of this up-and-coming generation:

1. Investment decisions driven by social media

Gen Z want to do their own research while investing in stocks and not rely entirely on financial advisers. However, from newspapers and journals to social media, the tools for research have evolved. Gen Z often rely on family and friends' reviews.

Through social networking platforms, such reviews and opinions rapidly find their way. In addition, influencers such as financial experts and mentors also serve as a key source of information.

2. Socially conscious investors.

When it comes to investing, Gen Z appear to be well educated and mindful of the choices they make. They not only look at returns, but also at the essence of the businesses in which they invest. 

They favour smart energy technology, clean tech firms, businesses that solve social issues such as poverty eradication, gender biases, etc.

3. Gen Z has a ‘debt-centred’ approach to its finances.

Having learned from the millennials’ experiences, Gen Z may be better prepared to handle many of the same challenges. For example, both generations have experienced an inflation in the costs of education, housing and personal expenses, making debt almost unavoidable. In turn, members of Gen Z are likely to be more proactive in addressing their debt, creating a real need for expert advice focused on debt management.

4. Gen Z makes informed investment decisions.

It has become easy to compare between products, services, companies etc. with the advent and access to technology. In the interest of the end customer, the fundamental business models have changed drastically. As a generation, Gen Z’s challenges are larger and more complex than previous generations, and they may not, at least not yet, feel well-served by algorithms as such. Education, patience, and an understanding of their individual circumstances are what they really need, along with a desire to help them achieve their objectives despite the many challenges they face.


How is Big Data Impacting Investing?

In the field of impact investment, data science is making inroads, helping programme designers and beneficiaries establish greater coordination between their priorities and strategies. Data really helps us understand the nature of the problem, and thinking about data ahead of time facilitates us in structuring our experiments and our interventions. Measuring data helps us prove what works and what does not, and then we can monitor and scale things up.

The financial industry is being pushed by big data and this is impacting investing. Large amounts of data are created every single day, since online trading has made it even easier to access the market from your phone using a top stock trading app or an online trading platform. Innovations in analytics, artificial intelligence, and machine learning are revolutionizing how effectively those in the financial industry can measure the impact of that data on the stock market.

Strong businesses with attractive valuations, positive sentiment and a strong connection with positive themes are trending in the markets. In the past, computers could only analyze structured data, or data that is easily quantifiable and organized in a set form. New technologies have now allowed us to analyse unstructured data, or data that is not as easily quantified. These innovations enable us to interpret information from a much wider variety of sources, including language, images and speech for the first time

Data is the cornerstone of investment models, but human judgement is still needed for the analysis and portfolio creation processes. When choosing the data and analytics that we use in investing, and also when evaluating and approving each trade in any portfolio, portfolio managers exercise their judgement. In order to determine the potential performance of any investment factor, portfolio managers often rely on their own practise experience and market awareness. This knowledge helps them to evaluate risk on a real-time basis more effectively.

As a win-win situation, impact investing is being driven, which is investing based on the social and environmental impact that the investments of an individual would have. It enables socially conscious older investors and millennials to gather information about their investments' environmental and social impact and invest in a way that could produce lower returns during off-periods, but surpass overall expectations and demonstrate resilience, especially when the economy is down.

Big data allows enterprises to analyse vast collections of relevant data, including publicly accessible financial statements, prices of consumer data, amounts, returns, etc. Non-traditional data sources can be compiled for this, including Internet web traffic, satellite imagery, patent filings, and more. The financial sector can obtain essential knowledge through the use of unusual and complex data that gives them the advantage when making informed investment decisions.

Big data and machine learning techniques are making it possible to glean information quickly from the data that is currently being gathered. But it is widely believed that mankind is just at the beginning of the data revolution. It is transforming the financial industry and every other industry around the globe.

How Will Infrastructure Spending Drive The Economy Forward In India?

The month of February saw the full rage of business sentiments in the country grappling with a slowdown. On February 11, Finance Minister Nirmala Sitharaman cited seven economic indicators, like a booming stock market, increased FDI and optimism among purchasing managers, to say that “green shoots” of a turn around were visible.

Skepticism abounds over whether the nearly $3 trillion Indian economy is growing fast enough to reach Prime Minister Narendra Modi’s GDP target of $5 trillion by 2024-2025.But signs suggest that economic activity may have bottomed out, and foreign institutional investors are placing big bets on India’s infrastructure sector, according to participants in a panel discussion at the recent Wharton India Economic Forum held in Mumbai.

The World Bank Global Economic Outlook for June 2020 forecasts that in the coming months, 90 per cent of the world’s countries will go into recession. Much earlier than Covid-19, the Indian economy faced headwinds and is currently looking at its fourth recession since independence, although the reasons are somewhat different from the previous ones.

Finance minister Nirmala Sitharaman on 11 September said that public spending on infrastructure will be one of the key factors that will revive economic growth that has witnessed a sharp contraction due to the outbreak of covid-19. Under NIP, the government has projected approximately 111 trillion investments in 2020-25 to build social and economic infrastructure to fuel economic growth. As regards to project financing, the National Infrastructure Investment Fund (NIIF) is one of the ways to fund infrastructure projects, she said.

Home to nearly a fifth of the world’s population, and with almost 65 per cent below the age of 35, it is imperative that we use the next few years to meaningfully employ this workforce. Investment in infrastructure could prove to be an important way to achieve this objective. TheUSD1.5 trillion (INR111 trillion) National Infrastructure Pipeline (NIP) built on Infrastructure Vision 2025 was announced in the pre-covid-19 world in December 2019. the success of the NIP will be dependent on three critical factors – human capital, innovative funding models and greater technological integration.

The finance minister’s comment comes at a time when India’s Gross Domestic Product(GDP) has contracted 23.9% on-year in the April-June quarter due to a stringent lockdown enforced across the country. Aided by easing of lockdown restrictions, India is now witnessing a ‘sharp V-shaped recovery’, the finance ministry said in the first week of September 2020.

Over the short to medium term, putting in place a strong framework for bankable projects, investment monitoring from commitment to actual completion and achieving steady-state operations for infrastructure projects will be critical. Investor and private sector confidence can be revived if the certainty and reliability of fund-flow commitments are brought back. There are, however, some challenges in the way ahead that must be overcome to achieve this acceleration in the economy.

Healthcare needs to remain the top priority with features such as an expanded primary healthcare network, multi-functional infrastructure, national health protection coverage and adoption of digital tech. Greater focus should be given on achieving the ideal state of mobility with convenient, affordable and enhanced last-mile connectivity through public transport.

Strengthening rural infrastructure should promote growth of agro-based industries, better access to markets for farmers and creation of job opportunities for the rural population.

This unprecedented Covid-19 crisis has also presented us with an opportunity to revisit how we conceive, design, regulate, build and operate physical infrastructure in our country. The multiplier effects have been long well established. The NIP presented a sound blueprint; building future ready infrastructure holds the key to reviving the economy and getting back on the development agenda with post-COVID re-prioritization and effective implementation.



PM Narendra Modi, in his national address on 12th May 2020, said the covid-19 crisis has taught India the importance of local manufacturing and supply chains. Modi talked about the importance of 'atma-nirbharta' (self-reliance) and announced a Rs 20 lakh crore fiscal relief package. Other measures on the table were tax sops, strict non-tariff barriers to discourage imports and domestic goods procurement.

With Covid-19 majorly affecting business around the world, one must answer a pertinent question: What will be the impact of the 'VocalForLocal' campaign on India's economy?

If you remember closely, this isn't the first time that Modi mooted the revival of swadeshi model. He launched the 'Make in India' campaign in September 2014, barely three months after he received an unprecedented single party majority mandate that junked the Congress welfare ideology. His vision envisaged a 12-14% growth in the manufacturing sector so that its contribution to GDP would rise from less than 20% to about 25% by 2025 and create an additional 100 million jobs by 2022. The objective was to fertilize a favorable environment for FDI investment in 25 specific sectors. The new policy was meant "to transform India into a global design and manufacturing hub". Six years later, the country is stuck in the quagmire of vested interests even though it was meant to move machines, and not minds, from the West and the Far East. 

Over 70% of our service and large industrial sector survive on  technology borrowed from abroad. India may boast of producing global technology companies such as TCS, Wipro and Infosys, but has hardly produced a prestigious and valuable international brand. India's R&D story is also dismal. According to official figures, it spends just around 0.7% on R&D against 2.1% by China, 2.8 by the US and 4.2 by South Korea. While the government spends about Rs 1 lakh crore on R&D, the private sector has contributed less than C6,500 crore. In contrast, Amazon spends over $16 billion, Volkswagen $16 billion and Samsung $9.15 billion. 

The wrong kind of local would be to promote goods that are made in India through tariffs, quotas and new government procurement rules. In several new areas, such as pharmaceuticals, and engineering goods, we have achieved global competitiveness over the last two decades. These have all flourished through international cooperation and input from global customers. 

Sustainable and resilient communities cannot be built on a fiscal and regulatory structure that is highly centralized. The Centre would have to develop to the states and the states to the locally elected representatives. If we adequately fund, support and trust local governments and remain open to absorbing both the knowledge and products that others produce better than us, we can create a society where all, not just a few, matter. If we insist that everything can be 'Made in India' and close borders because a crisis sealed them temporarily, we open ourselves to mediocrity and isolation, continued mass poverty and greater vulnerability to fund pandemics. We have the capacity to refocus on the right local, if only we could agree on the vision.



India’s real estate sector –both the residential as well as the commercial segment – has been impacted by the Covid-19 pandemic. The industry will need to reconsider pre-crisis priorities and accelerate new strategic initiatives to adapt to a “New Normal”. The sector will have to reinvent itself to understand, comprehend, plan and implement new innovative ways to meet the emerging new requirements.

While it will prompt the real estate sector to go back to the drawing board, it also offers new avenues to explore innovations as also to fast-track incorporation of new technologies, be it construction technologies and home automation. The planning would need to incorporate altered norms of social distancing, mobility, density and health considerations.

The Real Estate market has hit rock bottom with the pandemic as the numbers have gone down significantly.

  • The global real estate investments have declined by 33%
  • The market in Asia has been hit the worst with a fall of 45%
  • The supply of office space declined by 27%
  • The sales of residential property in India declined by 54%

houses would drive the buyers towards nearly completed projects, requiring the builders to put in much larger investments into their projects. Servicing these increased investments would create an additional financial burden, which will necessitate completing the projects in the shortest possible time for them to be able to sell their properties to the buyers to generate resources.

To minimise the construction time, the use of construction technologies would be imperative. These technologies would also be mandated by the non-availability of labour, especially migrant workers who may not return fast enough. Amidst all the crisis, the government reviewing its FDI policy for a 100% investment in real estate certainly presents a ray of hope. Companies with a good product mix of commercial, retail and residential properties would be the first to start gaining as the economy and realty markets recover.

No one is sure when will COVID get over, but it is going to change the reality sector significantly, most probably for the better. This is how we foresee the impact:

With Work from Home norms and more surplus available in the hands of investors, purchase of residential properties will see a rise. The residential property market in metros such as Bengaluru, Mumbai, Delhi, Pune and Chennai have witnessed an increasing number of young professionals vacating rented homes and paying-guest accommodation, or asking for rent relief. Many such tenants have moved to their hometowns or are in the process of doing so, with companies also extending the work-from-home option as there is no let-up in the pandemic situation.

Maharashtra government has also lowered the stamp duty from the existing 5 % to 2% in the Urban areas and from 4% to 1% in the rural areas starting September 1st till December 31st and will be pegged at 3% from January 1 till March 31, 2021. This will definitely give a push to the delayed purchases.

India Investment Potential: Foreign Direct Investment (FDI)

India Investment Potential: Foreign Direct Investment (FDI) 

Being a critical driver of economic growth, Foreign Direct Investment (FDI) has been a major non-debt financial resource for the economic development of India. For a country where foreign investment is coming in, it also means advancing technical know-how and generating employment.

The United Nations Conference on Trade and Development (UNCTAD) has said that India's economy could prove to be the most resilient in South Asia. Its large market will continue to attract investment opportunities to the country even as it expects a dramatic fall in the global foreign direct investment (FDI).

However, the inflow of FDI may shrink sharply when it comes to the market conditions post COVID-19 pandemic, the UNCTAD survey has shown that India jumped to ninth spot in 2019 from the twelfth spot in 2018 on the list of top global FDI recipients.

Market Size: 

According to the Department of Promotion of Industry and Internal Trade (DPIIT), FDI equity flow in India stood at US$ 469.99 billion from April 2000 to March 2020 indicating that the government's efforts to improve ease of doing business and relaxing FDI norms have yielded results. FDI equity inflows in India stood at UD$ 49.97 billion in 2019-20. 
  • Service sector at the highest FDI equity flow of US$ 7.85 billion 
  • Computer software and hardware at US$ 7.67 billion 
  • Telecommunication sector at US$ 4.44 billion 
  • Trading sector at US$ 4.57 billion

India: Investment Potential 

There is no dearth of investment options in India after the investment under the automatic route has been allowed by the Government. The Government has also revised its policy regarding FDI in Indian companies engaged in retail trade. Foreign investors will now be permitted, subject to certain conditions, to own up to 100 per cent of single-brand retail trading companies in India.

 According to UNCTAD's World's Investment Prospects survey, India is the second most profitable destination for foreign investment. India's markets have significant potential offering prospects of high profitability and a favourable regulatory regime for investments. 

Some of the significant FDI announcements made recently are as follows: 
  • In June 2020, Jio Platforms Ltd. sold 22.38 per cent stake worth Rs 1.04 trillion (US$ 14.75 billion) to ten global investors in a span of eight weeks under separate deals, involving Facebook, Silver Lake, Vista, General Atlantic, Mubadala, Abu Dhabi Investment Authority (ADIA), TPG Capital and L. Catterton. This is the largest continuous fundraise by any company in the world. 
  • In January 2020, Amazon India announced an investment of US$ 1 billion for digitising small and medium businesses and creating one million jobs by 2025.
  •  In January 2020, Mastercard announced its plans to invest up to US$ 1 billion in India over the next five years to double its research and development effort in the Indian market. 
  • In October 2019, French oil and gas giant, Total S.A., acquired 37.4 per cent stake in Adani Gas Ltd for Rs 5,662 crore (US$ 810 million), making it the largest FDI in India’s city gas distribution (CGD) sector. 
  • In August 2019, Reliance Industries (RIL) announced one of India's biggest FDI deals with Saudi Aramco to buy a 20 per cent stake in Reliance's oil-to-chemicals (OTC) business at an enterprise value of US$ 75 billion.

Road Ahead:

India is set to be the most attractive emerging market for global partners investments for the coming 12 months as per a recent market surge and shift towards the market. 

The government of India is aiming to achieve a whopping US$ 100 billion worth of Foreign Direct Investment (FDI) inflow in the next two years. 

Thus, we can say that the market conditions post COVID-19 seems to grow exponentially, with a vast array of investment options for the people of India.

What is an Indian perspective on wealth?

What is an Indian perspective on wealth?

Is it more than the quintessential 'Roti, Kapda, Makaan?'
In this age of consumerism, Indians have ‘evolved’ beyond these basic needs to arrive at a more aspirational approach towards their riches. Then again in a sense, wealth is rather meant to be aspirational to our middle-class minds.

Wealth is a highly subjective term that varies on our own thoughts whether they are logical or quaint. At its core, it is basically more of a want-driven term with its roots in abundance.

There are 3 phases generally prescribed in wealth cycles-
Accumulation, Preservation & Distribution. 
The methods of management are diverse in each but certain basic principles exist which are uniform across ages, AUMs & even asset classes!

Rambling from the subject at hand, it becomes necessary to look at various human tendencies that guide us on the journey to wealth.
Basic behavioral prejudices mark us out as either weak or focused. It is essential to have a clear path to our thoughts and to channelize our emotions.
Of course, it is impossible to invest without getting emotionally invested in your wealth! But to allow yourself to be steered by your sentiments, will not work.

For instance, in the Accumulation phase, too much aggression and misdirected risk-taking could highly diminish your portfolio. However, being highly conservative at this stage is also not conducive to a good growth rate.

For this reason, it is ideal to firstly have a financial plan in place. Once investments are linked to goals, it becomes relatively easier for investors to stay the course and not take hasty decisions.
Setting out your goals on paper is not very tough. Apart from the basic ones like Children’s goals, Retirement, etc, they can range from anything like a New Gadget to a Plan for a Work Sabbatical.
Prioritising goals becomes vital. This is another part where your behaviour and attitude towards finances comes into play.

The want factor, to put it crudely: Greed exists in us all. But we must exercise caution and tame this particular quality to avoid getting blindsided and swayed by market phases or irrelevant fancies.

Several biases haunt us in this quest for wealth. These include-
Anchoring bias- depends on initial facts alone.
Confirmation bias- looks for information that supports one’s beliefs only.
Herd mentality- to go along with peers or societal beliefs.
Hindsight bias/Rear-view Approach- the feeling that one would have been able to predict an existing event.
Availability bias- mental shortcut relying on immediate readily available examples.

Some other behavioral traits that inhibit portfolio growth are-
Constant comparison, asset preference, brand affinity, instant gratification, trust deficit and ignorance.

Churning of portfolios is also a plague inhabiting over-enthusiastic portfolios. Again, we can see the relation of assigning goals to our assets. Once this demarcation is clearly made, there is no temptation to play around with the allocation of assets regularly. However, it is important to allow for a re-balancing of portfolios after a timely review, when the need arises.

Moderation is key. Being too aggressive or cautious, too negligent or overbearing, never pays off in the long-term.

A time horizon as such would not always arise when we look at our wealth; for is it not meant to be passed on? Our cultural mindsets dictate that parents provide for children and look after their own parents as well. Thus, every family’s financial plan becomes more of a wealth management strategy when it involves several generations.

Wealth management is a holistic process. It speaks of bespoke customization towards an individual’s finances. In this case, considering the complete assets of the investor is essential. Successful asset allocation can only be achieved once the entire picture of assets and liabilities is available.

Planning and execution of investments are not seen to be particularly tough once there is clarity on the goals and on the assets apportioned to those goals.
As we like to say, it is more important to manage risks rather than push for astronomical returns. A conscious cycle of portfolio monitoring, along with well-defined asset classes, can go a long way in building wealth and withstanding all market climes.

Written By 
Ms. Khordeh Anklesaria