Need for fearless women investors community in India

Published: May 29, 2019, 16:41 IST | mid-day online correspondent | Mumbai

Historically, women in India have demurred from handling money matters. However, thanks to better opportunities in education and career for women, this scenario is slowly changing

Representational picture
Representational picture

As of 2014, Indian households it was estimated that an average Indian household invested hardly 5 percent of its savings in financial assets. However, the participation of retail investors in mutual funds has grown. By July 2017, Indian households held around Rs 9,80,000 crore in mutual funds. In spite of these encouraging numbers, most investors in the equities are men. Even if there are demat accounts in the names of women, their male relatives end up taking investment decisions on their behalf. Historically, women in India have demurred from handling money matters. However, thanks to better opportunities in education and career for women, this scenario is slowly changing. But there is still a need for a community of fearless women investors in India. Priti Rathi Gupta Founder of LXME and MD of Anand Rathi Group lists out some of the reasons for this:

Women are better investors than men

Several studies have concluded that women are better investors than men. According to Fidelity Investments, which analysed accounts of more than 8 million investors, women not only saved more than men but also performed better. Investments made by women earned 0.4 percent more than the ones made by men. This difference may not seem like much but over a longer term, it can make a huge impact. Women tend to diversify their portfolio due to which their losses are limited.

Women are goal oriented

Women take their time to research, analyse and then invest. They are patient in dealing with market volatility. Women listen to advice offered by experts and incorporate their insights, if suitable, in their investment strategy. Long term goals such as saving up for the down-payment that may be required in purchasing a house or arranging funds for children's education are crucial milestones for women. Once women tie their goals to their investment decisions, they rarely lose sight of the bigger picture.

Women live longer

On average, women live five to seven years more than men. Women are also likely to take frequent and longer breaks from work than men to care for their families. Adding to this is the fact that women tend to receive lower salaries than men. Hence women have to contend with smaller retirement benefits as compared to men. Therefore women would need a larger retirement corpus than men during their sunset years.

Rise of role models

When we discuss leading investors in India, we can hardly think of any female names. It is imperative that women achieve success and publicity as successful investors. This enables them to be seen as role models. It would be a matter of time before other women start following their footsteps.

Inspire other women to take investing decisions

As women learn and thrive by investing in mutual funds, they are likely to influence other women to invest. By witnessing success stories of female investors, a larger number of women would be inspired to begin their investing journey.

Increasing participation of women in financial services

It may also result in an increased influx of women into financial services. Presently a significant percentage of mutual fund distributors are men. The rise of female mutual fund distributors will play a key role in increasing the number of female investors.

Educate a woman and entire family gets educated

It is believed that by educating a woman, the entire family gets educated. By ensuring that women receive education about the benefits of investing, financial literacy in India can be vastly improved. As women turn into influential and vocal investors, firms in the financial services space will be forced to offer customised solutions for female investors. They will seek to address women-specific issues while formulating investing platforms, distribution strategies and customer service.

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