The rise of female investors in the post-pandemic era

Many platforms which offer direct mutual fund investment experience are seeing new accounts opened by women investors who want to invest in different mutual funds for achieving their financial goals.
The trend of young women in India learning the ropes of the investment game can have positive trickle-down effects on the overall female investor participation levels in India.
The trend of young women in India learning the ropes of the investment game can have positive trickle-down effects on the overall female investor participation levels in India.
Published on Nov 26, 2021 07:03 PM IST
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ByHT Brand Studio

When it comes to matters of the wallet, the norm in most Indian households is to let the male members of the family control the reins. Traditionally, women had little to no say in how the wealth of the family was managed and they were not expected to go beyond maintaining the monthly household budget and safely stashing the extra bits of cash left at the end of the month. The gold jewellery that women would get during their wedding ceremonies would be the only assets over which they had unadulterated autonomy.

While there is still a long way to go in terms of achieving parity with men in the department of financial participation, a wave of change is underway. The younger generation of women in India, who have had the privilege of better education than their mothers and grandmothers is choosing to push the boundaries and is privy to the importance of managing money on their own. They are also realizing that relegating control of finances entirely to their fathers, siblings or partners is synonymous with the loss of control over their own lives to an extent. After all, in the case of women, especially those who are married, financial independence can double up as a solid safety net which can safeguard them if their marital lives are in shambles.

The trend of young women in India learning the ropes of the investment game can have positive trickle-down effects on the overall female investor participation levels in India. According to a recent survey conducted by Groww, an online investment platform, women in the 18-25 age group emerged as the most independent cohort, where almost 60% of women in this age group say that they make the ultimate decision on their investments. Many women in India, despite being financially independent, find themselves struggling to invest on their own due to lack of confidence that stems from the stereotype that men are inherently better than women in managing money. Also, the lack of female role models and peers cements these erroneous perceptions that money management needs testosterone.

Aditya Birla Sun Life Mutual Fund has started a special initiative called For Her that focuses on financial inclusion of women and intends to provide them avenues for financial security.
Aditya Birla Sun Life Mutual Fund has started a special initiative called For Her that focuses on financial inclusion of women and intends to provide them avenues for financial security.

With young women in India confidently taking charge of their finances, it can pave the way for women of older generations to start their investment journey. 25-year-old Radhika Malhotra (name changed) says her mother’s interest in managing money by herself has largely been fostered because she has been successfully managing her finances for a few years now. “Seeing me handle my savings and investments all on my own made her believe that it is very much doable and that she too can do it if she wants to without having to depend on someone else. I taught her the basics of investing, made her familiarize herself with using online investment portals and nudged her to read extensively about different kinds of investments on the internet. I feel elated to see this transformation in her – she has an impressive portfolio now that is performing quite well,” Malhotra says.

The coronavirus pandemic and the subsequent lockdowns changed the way people work, spend, save and invest and surprisingly, data from multiple sources indicated that since the pandemic began, there has been a rise in the number of women investors. The economic downturn unleashed by the pandemic led to job losses and pay cuts and many women found themselves having to look for alternatives to maximize their families earnings. The prevailing uncertainty during the lockdowns, the dismal performance of fixed deposits and the slump in real estate pushed many to take up stock trading and mutual fund investments.

Vaneesha Chopra, a 40-year-old housewife based in Bhubaneswar was also one of those who forayed into the world of investments because of the exigencies brought about by the pandemic. “My husband’s business was badly hit during the first lockdown and we found ourselves being pushed to a corner. I started a small business from home when the restrictions eased a little and I took an active interest in investing the proceeds from there. I dabbled in mutual funds because I found the investment process very convenient and less daunting than stock trading. The returns from the mutual fund investments enabled us to get back on our feet sooner than we had anticipated.”

Women like Vaneesha have also benefited immensely from the rapid digitization of financial services and the vast reserve of knowledge that they can access online free of cost. Previously, it was common for women to stay away from money management exercises because it was impossible to do so without trusted brokers. However, widespread internet connectivity, the availability of financial apps and portals that provide data in real time and levy negligible brokerage charges are enabling many women to jump on to the investment bandwagon without having to depend on the male members of the family.

Chopra says, “I was able to take the plunge into the world of investments solely because of the fact that I had easy access to quality information. If I had to take money management lessons from someone in person, I would not have been able to take even baby steps. Running a business and a household and looking after the family leaves me with little spare time but thanks to the internet and the plethora of apps that are available I could dedicate time for this at my convenience.”

Preeti Zende, founder of Apna Dhan Financial Services says, “Despite being adept at running households on limited budgets, women have rarely been actively involved in managing finances. However, things are changing. Not only working women but homemakers are also taking control of their own finances. Surprisingly there is a surge in women investors post-covid who are actively investing in mutual funds, direct equities as well IPOs.”

Zende feels that mutual funds as an asset class have also catalyzed the spurt in the financial participation of women. “Women tend to be more cautious about risk and as such many women are choosing the mutual funds route to penetrate the equity asset class. Mutual funds offer diversified risk and the biggest advantage is that you can start with a minimum investment amount and not have to wait to save a lumpsum amount. Many platforms which offer direct mutual fund investment experience are seeing new accounts opened by women investors who want to invest in different mutual funds for achieving their financial goals.”

The shift to the work-from-home apparatus because of the pandemic has also given women more leeway to enhance their financial literacy. “The work-from-home structure has helped many women to dedicate time to learn about different investment products at their own convenience. Hopefully the easy availability of learning apps and investment tools can ensure the trend continues in the post-covid world,” Zende iterates.

Key Takeaways

- Planning for long term financial goals may seem stressful if you are new to the game of investing. It is better to seek professional advice than making wrong decisions which can erode your wealth.

- SIPs in mutual fund investments can be a great way to start investing. You can start SIPs with as little as 500.

- Staying updated about the latest developments in the world of business and finance can enhance your decision-making skills.

- The work-from-home structure has helped many women to dedicate time to learn about different investment products at their own convenience.

This article is part of the HT Friday Finance series published in association with Aditya Birla Sun Life Mutual Fund.

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Sunday, January 16, 2022