Stocks vs Equity Fund vs Index Fund: Alice Blue
Bengaluru (Karnataka) [India], July 21: Equity investment is simple, but it requires perseverance, resilience and the right amount of determination to achieve success. Over the last few years, especially post-Covid-19, the world has gone through major economic events such as the Russia-Ukraine war, soaring inflation, the 2-year US treasury yields hitting 16 years high, commodity prices going through the roof, continuous lockdowns by China and others. These geopolitical tensions led to a global supply chain issue.
Despite all of this, the Indian markets performed relatively better than other major global equity markets. In FY23, the US Dow Jones fell about 4.05%, while the Hang Seng declined by 7.2%. On the other hand, the Nifty remained flat at -0.6%.
The Indian economy certainly had a stronger macroeconomic situation than other countries. In fact, the Indian equity market witnessed a staggering 2.5 crore new demat accounts being opened in FY23. The industry has grown from just 3.59 croredemat accounts in FY19 to 11.45 croredemat accounts in FY23.
The DIIs took the market to new highs on 1 December 2022 at 18887 levels. They poured in above 2.5 lakh crore in the cash market. The FIIs suffered the fear of missing out and started putting in their money from March 2023 onwards.
If one looks at Q1FY24 (Apr-Jun 2023), FIIs have poured in more than Rs. 60,800 crore in the cash market, taking the market to new life-highs of above 19700 levels now. From a risk-return perspective, equity returns can be significantly higher than an equity/index fund. However, the investor also needs to understand the extent of the price risk involved.
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