About 7 in 10 investors unable to generate even benchmark index returns, says Samco-Nielsen survey

• About 67% of stock market participants fail to beat the benchmark market index, shows a survey on Indian capital markets and investor behaviour, by Samco Securities and Nielsen.
• The survey reveals that 65% of investors are not even aware of their exact stock market returns.
• Most Indian Investors and traders are unable to generate even benchmark threshold returns, says the report.

About 67% of stock market participants fail to beat the benchmark index, shows a Samco Securities and Nielsen survey on Indian capital markets and investor behaviour.

Benchmarks represent an average performance of a group of top large company stocks. And outperforming the benchmark is important for an investor, as it means that the stock in her portfolio has beaten the average returns.

“In an alarming trend, most Indian Investors and traders are unable to generate even benchmark threshold returns. This can be attributed to a variety of factors like lack of a trading system, fault performance measurement, acting driven by emotions in times of greed and fear, relying on tips and financial influencers, excessive leverage, etc,” said the report.

The survey reveals that 65% of investors are not even aware of their exact stock market returns.

About 77% of investors are not even aware that they consistently need to beat the benchmark indices. Among the limited 23% investors who are aware that they need to beat the benchmark indices, more than 50% have no aspiration or idea about how to outperform the benchmark indices.

The survey shows 63% investors don’t even target or have any plans to beat indices.

“Individual stock market participants must run their trading accounts in a manner where they must consistently outperform the benchmark indices. Alternatively, they should probably stop active trading, as they are likely to have much better financial outcomes by simply investing in an index fund or outsource to a professional fund manager,” said Jimeet Modi, founder and CEO, Samco.

In 2022, Indian benchmark indices the Sensex and the Nifty50 had outperformed global benchmarks including that of the US, Europe and the rest of Asia. However, the trend has reversed in 2023, with the Indian benchmark indices underperforming global peers due to macro headwinds and high volatility.

Samco has launched a next-gen Capital Resource Planning (CRP) trading platform on web & app to enhance investors’ investment performance and beat the benchmark market returns. The investment platform claimed that about 32% of investors who are already on the CRP platform were able to beat the benchmark indices for Q4 CY 2022. The Nifty50 during the same period delivered a return of 7.75%.

The Samco-Nielsen survey has been done across 10 major cities of Delhi, Mumbai, Ahmedabad, Bengaluru, Pune, Surat, Kolkata, Hyderabad, Chennai and Jaipur. It was conducted on approximately 2,000 investors and traders in the age group of 24-45 years. Nielsen is a data and analytics firm while Samco is an investment platform.

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