1、Expanding horizons for WealthTechs:Alternative investment productsMay 20242 PwC|Expanding horizons for WealthTechs:Alternative investment productsIndia retail investment landscape and growing prevalence of WealthTechs1.IMF World Economic Outlook2.RBI Annual Report3.NSDL4.5 Paisa5.AMFI6.The Hindu Bus

2、iness LineFactors such as increasing consumption(especially in tier-2 and tier-3 cities)coupled with growth of the aspirational middle class,increase in digital and financial awareness,comparatively higher yield than banking products(like time deposits,CASA accounts),demand for higher yield products

3、 and diversification are leading to investments beyond basic banking products.Interest and exploration in this area gained traction during the Covid-19 pandemic when interest rates were low1,2 and there was a liquidity surplus,which catalysed growth and investments in instruments like fixed income a

4、nd alternative investment products that offered higher yields and clear visibility of returns to the investors.Similarly,mutual funds(MFs)systematic investment plans(SIPs)and equity-linked investments have picked up pace among the Indian retail investors.The growth in retail investments is also subs

5、tantiated by the fact that Demat accounts have tripled in a five-year period from FY19 to FY23,from 3.6 crores to 11.5 crores respectively.3,4 Furthermore,asset under management(AUM)under MFs saw more than two-fold growth in a span of five years,from INR 14,000 crores in 2019 to INR 27,000 crores in

6、 2023.5A major driver for this growth is the new-age WealthTechs with their product innovations that focus on ease of onboarding,low charges,user-friendly interfaces,simplification of investment journeys and personalisation of investment management processes.For instance,as of December 2023,digital-