From Piggy Bank to Bull Run: 3 signs that middle class is making money in stock market

India is a country marked by significant wealth inequality — greater than even income and consumption disparities. However, a positive shift is underway. According to a ToI report for the first time, the Indian middle class is gaining access to wealth creation through mutual funds, thanks to the removal of barriers related to location, affordability, and transparency.

Here’s how this wealth-building opportunity is unfolding:

The shift is evident

The share of deposits has dropped significantly, while the post-Covid surge in share prices has made equities the highest-returning financial asset.

10 Years, $2 Trillion in Equity Wealth

A recent report by Morgan Stanley highlights a remarkable wealth accumulation trend in India over the past decade. In total, Indian households have amassed $9.7 trillion in wealth.

Among the various asset classes, property remains the dominant source of wealth.

However, gold and equities have also played significant roles. Gold accounted for 22% of the wealth added in the last 10 years, while equities contributed 20%.

Most notably, Morgan Stanley estimates that Indians, including entrepreneurs and founders, have generated an impressive $2 trillion in wealth through equities during this period.

This surge in equity wealth has been fueled by a combination of factors, including strong post-Covid market rallies, increasing access to financial markets, and the growing popularity of mutual funds among the Indian middle class.

The rise in stock market participation reflects a significant shift in investment behavior, as more individuals seek higher returns and financial growth through equities rather than traditional, low-return assets like bank deposits.

(Graphics: The Times of India)