A report on the capital markets by Nielsen for SAMCO Securities has found that 67% of market participants failed to beat the benchmark returns. Further, most Indian investors and traders also fail to even generate benchmark threshold returns.
Lack of a trading system, fault performance measurement, investment decisions driven by emotions in times of greed and fear, impact of finfluencers and excessive leverage were cited as the major factors.
While 77% was not aware of the need to consistently beat the benchmark indices, more than half the remaining 23% ― who was aware ― had no idea how to go about the same. Not only that, 63% didn’t even target or have any plans to beat the indices.
SAMCO has urged investors to join ‘Mission – Ace the Index’, which seeks to build a “culture of outperformance” among Indians. It is encouraging Indians to research and analyse investment opportunities and manage portfolios actively. It has recommended turning to a professional fund manager if they are unable to manage it actively, or invest in index ETFs tracking relevant benchmarks to ensure one is aligned with the overall market performance.
The firm has launched the Capital Resource Planning (CRP) platform on the web and as an app to enable investors to create their own personal index that could help them keep track of returns in real time and benchmark them against broader market indices as well as against leading active fund managers.
Jimeet Modi, founder and CEO, said: “Performance measurement, reporting and benchmarking are done fairly well in MFs. Sebi has even recommended the same for PMS from April 1. However, performance measurement is fairly poor among individual retail investors even though they are their own money managers. We are thrilled to launch our next-gen CRP platform to empower stock participants to achieve their best financial performance.”