Indian Women Moving Beyond Gold, FDs; Increasingly Investing In Equities

Women are increasingly taking control of their finances and changing the face of India’s investment landscape. They are moving beyond traditional investment options, such as fixed deposits (FDs) and gold, and are now showing more interest in equity and equity-oriented mutual funds.

According to a recent article by the CFA Institute, Indian women have been channeling more money into equities in recent years. They now hold nearly one-third of India’s retail mutual fund assets, a share that has more than doubled in five years, the article mentioned. Their investments in mutual funds have increased from Rs 4.59 lakh crore in FY19 to Rs 11.25 lakh crore in FY24, according to Association of Mutual Funds India (Amfi) and Crisil Intelligence.

Much of this growth has come through Systematic Investment Plans (SIPs), which have seen a 319.30 per cent rise among women investors over the same period, according to the Amfi. This trend suggests that women are adopting long-term, disciplined investing rather than relying on one-off investments.

Further, data from a State Bank of India (SBI) report shows that one in every four new stock market investors is female, and their participation in markets is steadily increasing, with nearly 30 million new demat accounts being added annually since 2021.

“I think we have had a silent revolution over the last two decades. Women have woken up to the fact that we can own, manage, and control our own financial destiny,” said Renu Maheshwari, chairperson of the Association of Registered Investment Advisers in India (ARIA), as mentioned by the CFA Institute article.

Urbanisation

This rise can be attributed to the broader social shift where more and more women are getting educated, joining the workforce and earning their own income. Women’s participation has increased from 23.30 per cent in FY18 to 42 per cent in FY24, according to data from the Ministry of Statistics and Programme Implementation’s annual report.

Women are also increasingly moving to cities, and accordingly, their lifestyle and financial behaviours are also changing. This shift is creating more opportunities and awareness around investing. Young women under age 35, especially in emerging urban regions, are now the fastest-growing segment of investors, according to an Angel One report.

Jitendra Gohil, CFA, chief investment strategist at Kotak Alternate Asset Managers, calls this a “natural outcome of this evolution.”

Access To Digital Tools

India’s digital public infrastructure such as the unique digital identification and unified payments interface (UPI) have made investing simpler and more accessible for many, including women.

Priti Rathi Gupta, Founder of LXME, a women-focussed financial platform, said, “What that did was really make digital access very easy for people. That democratisation has allowed a very large population to start this journey.”

"Fintechs have also played a key role in taking this to people at the ground level to create awareness and enable them to put their small savings into mutual funds,” she added.

A Disciplined Approach

Women investors in India are more disciplined and goal-oriented when it comes to investing. 

Gupta noted that women tend to be goal-oriented, which makes them more patient and disciplined in building their wealth. Market data also backs this up. Data from Amfi and Crisil Intelligence show that over the last five years, women have outperformed men in average folio size. Using March 2019 as a base of 100, the average folio size for women rose to 123 by March 2024, while men’s average reached just 98.

However, despite the increasing participation and increasing appetite for taking risks, experts caution that many of these new investors have never faced a major market crisis, such as the 2007-08 global financial crisis and the 2020 Covid-19 market crash. 

Maheshwari said this makes them “a little fearless compared to previous generations.” She emphasised that there is a need for continued financial education to help new investors understand market risks and complexities of various financial products to ensure that they make informed financial decisions in their journey of building wealth.