Women & Mutual Funds: Investing For Financial Empowerment

Women are transforming their financial futures through mutual funds, breaking stereotypes and building wealth. Prajwal Wakhare explores how women can invest confidently, leverage SIPs, and navigate risks in this cover story. You will also learn why mutual funds are the key to financial empowerment, offering diversification, tax benefits, and liquidity. Take charge of your finances – start investing today! [EasyDNNnews:PaidContentStart]

In the late 18th century, Abigail Adams, wife of U.S. President John Adams, made a remarkable financial move. While her husband was busy shaping a nation, Abigail was shaping their wealth. She invested in government bonds, navigating the financial markets with precision—ultimately quadrupling their fortune. Her story is a testament to the financial acumen that women have always possessed, yet history often overlooks this fact. 

For generations, societal norms dictated that finances were a man’s domain, leaving women with the role of savers rather than investors. But times are changing. Women today are not just managing household budgets but are launching businesses, leading corporations, and taking charge of their financial futures. This shift is not only empowering on a personal level but is also driving economic growth and transforming India’s financial landscape. 

Women as Investors: Breaking Barriers
Despite significant progress, a gender gap persists in investing. In India, for every five investors, only one is a woman. Cultural conditioning, lack of confidence, and financial jargon often create hesitation. Many women still prioritise saving over investing, despite evidence that investing is crucial for wealth creation. Yet, studies consistently show that women investors have an edge. They tend to be more disciplined, goal-oriented, and long-term focused compared to men. Women also exhibit lower risk-taking tendencies, which often leads to better investment decisions over time. 

Mutual Funds Are a Game-Changer
For women looking to take their first step into investing, mutual funds provide an excellent starting point. They offer diversification, professional management, and the flexibility to invest systematically through SIPs (systematic investment plans), making them a structured and accessible option. Unlike direct stock investments, mutual funds mitigate risks by spreading investments across different assets. 

Moreover, mutual funds align well with various financial goals—whether it is saving for a child’s education, building a retirement corpus, or achieving financial independence. Women no longer need to be financial experts to make informed investment decisions. Mutual funds do the heavy lifting, allowing them to grow wealth with ease. There are many mutual funds that are so designed as to match both short-term and long-term goals, thus making the investment process easier. 

The Path to Financial Empowerment
Women have always played a crucial role in financial decisionmaking, often managing household budgets with precision. The next step is to extend this expertise into wealth creation through investing. Financial independence is not just about having money—it’s about having choices, security, and the ability to shape one’s future. Mutual funds offer a simple yet powerful way to bridge the investment gap and help women take control of their financial destiny. By embracing investing, women are not just securing their future—they are redefining financial empowerment for generations to come. 

Research
It is really encouraging to see how women are stepping up in the world of financial decision-making, especially when it comes to investing in capital market instruments like mutual funds. This shift is becoming more noticeable as the mutual fund industry itself has been growing rapidly, recently hitting the ₹66.93 lakh crore milestone. Women are definitely making their mark here. According to data from March 2024, the percentage of womenowned folios (investment accounts) has stayed steady over the past six years. 

Their share of the industry’s total assets has grown significantly from 15 per cent in March 2017 to nearly 21 per cent by December 2023. What is even more exciting is that this growth is happening faster in smaller towns and rural areas compared to the big cities. For example, in B-30 cities (those beyond the top 30 urban centres), the percentage of women-owned folios has gone up from 15 per cent to 18 per cent, and their share of assets has jumped from 17 per cent to 28 per cent during the same period. 

An analysis of the state-wise share of women in the mutual fund industry shows that Goa has the highest share, at 40 per cent, followed by states from the northeast. Chandigarh, Maharashtra and New Delhi also have over 30 per cent share of women in the industry’s assets under management. The age analysis of women investors indicates almost 50 per cent fall in the 25 to 44 years age group, versus around 45 per cent for the overall set of individual investors, showcasing higher inclination among young and middle-aged women to invest in new-age capital market instruments. 

Women in the 45-58 and above 59 years group account for 21 per cent and 16 per cent of the folios versus 15 per cent and 11 per cent, respectively, for the overall set. Women in the higher age brackets would be using their investing experience to expand into products such as mutual funds for their financial planning needs. It is quite clear that women gain confidence in investing once they have cleared the initial phase of hesitation. Data shows that as they improve their processes, they command a better control over their investment strategies, taking very clear-cut decisions. 

Age Profile of Mutual Fund Investors


With improving ease of access to information and technology, we are seeing women investors opting to invest directly in the mutual fund industry through direct plans. However, most of them continue to invest through the regular plan route in mutual funds. And who better to handle a woman investor than a woman herself, since she may understand the financial planning needs better. The number of active women distributors has increased steadily since March 2017 to near the ₹21,000 registration mark as of December 2023, with the total AUM managed by them closing in around ₹1.7 lakh crore as of that period. 

Women Mutual Fund Managers
The latest findings of Morningstar Research as of January 2024 showed that of the 473 fund managers, 42 are women who are managing funds either as primary or secondary managers. 
There were 42 female fund managers across 21 fund houses. Five had three or more, five had two, and 11 had at least one female manager. Women managed or co-managed ₹6.66 lakh crore in mutual fund assets, making up 12.63 per cent of the total. This marks a sharp 50 per cent rise from year 2023’s ₹4.44 lakh crore mutual fund assets. 

Growth of Women Mutual Fund Distributors

More women must join the distributor community, not only to further the penetration of mutual funds in the country but also to generate more employment for women in the country. 

Why Women Should Invest in Mutual Funds
Studies have shown that women often feel less confident in making financial decisions, even when they possess the necessary knowledge. The perception that investing is complex or risky often discourages women from taking the first step. Women inherently possess qualities that make them successful investors. They are natural savers, patient decision-makers, and excellent at multitasking – all this is crucial for long-term investing. Mutual funds provide an accessible and structured way for women to build wealth over time. 

Here are some key reasons why mutual funds should be a preferred investment avenue: 
1. Diversification: Mutual funds spread investments across various assets like equity and debt, and commodities like gold and silver also have exposure to the global equity market with reduced risk. In the equity part, it further diversifies investment in Large-Cap, Mid-Cap, Small-Cap and other categories.
2. Professional Management: Expert fund managers handle investments, eliminating the need to constantly monitor investments.
3. Systematic Investment Planning (SIP): Women can start investing small amounts regularly, ensuring disciplined investing. There are SIP mutual fund schemes with a minimum investment amount of ₹100. Recently, the Securities and Exchange Board of India (SEBI) has proposed the ‘sachet’ approach of SIPs by lowering the barrier of investments to ₹250 per month.
4. Tax Efficiency: Certain mutual funds like Equity Linked Savings Scheme (ELSS) offer tax-saving benefits under Section 80C.
5. Liquidity: Unlike fixed deposits or real estate, mutual funds offer better liquidity options and are always better compared to them. 

Getting Started: A Simple Checklist for Women Investors
For women who are new to investing, taking the first step is crucial.Here’s a checklist to begin the journey towards financial empowerment: 
■ Documents Needed: PAN card, Aadhaar card, and a bank account with internet banking.
■ Choose an Investment Goal: Identify short-term and long-term financial goals. For example, vacation goal, retirement plan, medical fund or owning a vehicle.
■ Understand Risk Tolerance: Women should assess their financial commitments before selecting fund types. You can approach any SEBI-registered financial advisor or seek professional guidance for your risk profiling or risk assessment.
■ Select the Right Mutual Funds: Over the internet, various platforms or a website of the Association of Mutual Funds India (AMFI) can help compare funds based on performance.
■ Begin with SIPs: Starting with a small, manageable SIP amount ensures consistency and gives surety of accumulating a healthy corpus for future needs. 

Golden Rules of Mutual Fund Investing
1. Short-term money should not be in equity. For shortterm needs, low-duration debt mutual funds or fixed deposits are considered safer options.
2. Long-term money belongs in equity. Investing in equity mutual funds over long durations generates better inflation-adjusted returns. Always prefer SIPs instead of lump-sum investments. 3. Staying disciplined and avoiding market-driven panic is crucial. Women investors should stay focused on their goals and not react impulsively to market fluctuations. 

Insurance: A Crucial Component of Financial Planning
Apart from investing, women must ensure their families’ financial security through insurance. Buying a term insurance plan is essential, especially for those with dependents. A well-structured insurance policy ensures financial stability in case of unforeseen circumstances. 

Addressing Traditional Investment Preferences
Despite the advantages of mutual funds, many women still prefer traditional investments like fixed deposits and gold. While gold has cultural significance in India, it is not the most efficient investment. For example, hard gold in terms of jewellery has high transaction costs, which reduce the returns. Instead, gold ETFs or sovereign gold bonds offer better investment potential. However, long-term financial security is best achieved through equity investments rather than fixedincome assets alone. 

Power of Financial Planning and Execution
One area where women excel is disciplined financial planning. Their methodical approach makes them well-suited for long-term investment strategies. For example, if saving for a child’s education, women should start withdrawing systematically through the systematic withdrawal plan (SWP) before the goal date instead of making last-minute decisions or keeping the same amount in a locker for long periods. 

Financial Rules Are Gender-Neutral
Investing is not gender-specific and both men and women can follow the same financial principles. Understanding risk, setting financial goals, and staying invested for the long term is the key to success. Women must recognise their ability to make independent financial decisions and take proactive steps toward wealth creation. 

Conclusion
Women have all the skills needed to be successful investors. By breaking traditional mindsets and embracing mutual funds, they can take control of their financial future. Starting early, following simple investment rules, and staying committed to financial planning can ensure long-term financial empowerment. The journey to financial independence begins with the first step and so start investing today. 

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