Raised in the age of smartphones, social media and instant access to information, Generation Z is entering the world of investing earlier than any generation before it. The April NSE Market Pulse showed that investors below 30 years of age made 38.4% of the exchange’s investor base at the end of March 2026, as against 29.4% at the end of March 2021.
In mutual funds as well, Gen Z segments had the highest assets under management (AUM) per capita growth between FY23 and FY25 at 65% (salaried Gen Z)–75% (Gen Z students) versus an average of 55%, according to a 2025 collaborative analysis by Bain & Company and Groww. This is based on Groww’s investor base that was onboarded before 31 March 2022 and remained active till 31 March 2025. Young, salaried investors increasingly bet on smaller, riskier companies; nearly half their money was invested there by FY25, up from 35% two years ago, the analysis found. They were also the quickest to act on market mood, often letting emotions drive decisions as much as research.
The data reflects a generation moving beyond the comfort of fixed deposits and other conservative financial habits often recommended by their parents, towards a more self-directed approach to investing.
While this is good, the fact that most of these digital natives are investing in assets not on the back of sound professional advice but herd mentality and picks by finfluencers is a cause for worry.
Chasing higher returns
For 26-year-old Delhi-based investor Ruchir Dhingra, mutual fund investing alone is not enough. According to him, the post-covid market rally delivered returns far beyond what many mutual funds could capture. Instead, he prefers investing through curated baskets of stocks and exchange-traded funds (ETFs) on Smallcase. He follows financial influencers for news and investment ideas and has also enrolled in courses to understand company fundamentals on his own.
Yet, despite his preference for direct investing, Dhingra recently began a weekly systematic investment plan (SIP) of ₹1,000 in Jio BlackRock's flexicap fund, largely because of the trust associated with the BlackRock brand.
Similarly, finance professional Anhad Khanna, 24, said he is gradually increasing his exposure to mutual funds, believing they are a safer option in the current environment where global uncertainties are weighing on stock markets. He is also exploring commodities as an alternative asset class.
While Dhingra says he invests only with a long-term horizon, Khanna maintains two separate demat accounts—one for long-term investing and another for short-term trading.
But both are reluctant to pay for financial advice and prefer to rely on personal research, peer networks, and online resources to make investment decisions, even though they have studied finance.
The rise of DIY investing
Market experts believe Gen Z’s investing behaviour reflects both opportunity and risk. Nilesh Shah, MD, Kotak Mahindra AMC, described Gen Z as “a bundle of contradictions.” According to him, while some highly skilled young investors are joining high-frequency trading firms or building sophisticated, research-backed investing strategies, many others are being misled by unreliable social media tips.
“Some learn from mistakes, and some learn from others' mistakes,” Shah said.
Anchal Kansal, advisory manager at Green Portfolio PMS, believes Gen Z investors broadly fall into two categories: those working within financial services ecosystems who are naturally exposed to conversations around investing and those whose primary source of knowledge is social media.
She added that this generation is also redefining financial priorities. Instead of following traditional goals centred around stability and savings, many young investors are more willing to spend on experiences such as travel and lifestyle choices.
Newer platforms
Platforms are also evolving to target younger investors. Vedant Gupte, founder and CEO of Trackk, a stock investment platform for people aged 18 to 30, said Gen Z investors tend to favour direct equities, especially those they personally relate to.
“They’re not just investors, they’re brand loyalists putting money where their identity is,” he said, referring to investments in consumer technology, FMCG and retail companies familiar to younger audiences.
He also pointed to the growing popularity of the “retire early” mindset among Gen Z, with many beginning their investing and trading journeys much earlier than previous generations in pursuit of financial independence and lifestyle flexibility.
At the same time, Gupte highlighted the influence of peer networks in shaping financial decisions. According to Trackk’s research, nearly 72% of first-time investors in India place their first trade based on recommendations from friends. “The responsibility of new-age platforms is to ensure this generation does not end up losing significant amounts of money,” he said.
Social media influence and the fear of missing out
According to Shashank Udupa, a Securities and Exchange Board of India (Sebi) registered RA and Fund Manager at Smallcase, Gen Z’s heavy engagement with social media often amplifies herd behaviour. He noted that increased online discussions about trending sectors and “success stories” encourage young investors to enter markets at peaks, driven by the fear of missing out (Fomo) rather than by disciplined investing.
Most Gen Z investors, he said, entered markets after the post-covid boom and therefore carry unusually high return expectations. “Reality has not hit them yet,” he added.
Ishkaran Chhabra, chief investment counsellor and founding partner at Centricity WealthTech, echoed similar concerns. He pointed out that many do-it-yourself (DIY) investing platforms fail to provide emotional support during volatile periods. “A key reason for stopping SIPs on DIY platforms is the absence of expert guidance to manage expectations during dips, leading to panic exits,” he said. He added that while Gen Zs are investing in mutual funds, they are not staying for a full cycle.
Silver lining
Yet there is a silver lining—each of these experiences can ultimately yield important lessons. Udupa believes the DIY investing culture itself is not necessarily negative. In his view, it is better for investors to begin learning with smaller sums early in life rather than remain financially unaware until later.
Samir Arora, founder & fund manager at Helios Capital, said every generation is shaped by its own experiences and role models. However, he warned that the rise of online investing platforms and the gamification of trading may be pushing younger investors towards speculative behaviour. “Older generations did not see this much activity in futures and options and other zero-sum activities,” he said. Arora argued that much of what is popularly called “trading” today resembles gambling more than investing. Still, he acknowledged that such losses may ultimately become a learning experience for young investors. “We can put these losses down to education fees,” he said.
Ultimately, while Gen Z is embracing the asset class that suits their age profile, one concern right now is that their decisions are shaped by easy access and noise. Advisors believe that focusing on a structured approach to wealth creation, avoiding herd mentality and Fomo, avoiding excessive leverage, and developing stronger awareness of risk, diversification, and long-term investing will be critical to shaping this generation into disciplined investors.