According to a report by the Association of Mutual Funds in India (AMFI), the number of women investors in the mutual fund industry in India rose to 74.49 lakh at the end of December 2022, against 46.99 lakh in December 2019, indicating a growth of 58% in three years. Women invest in mutual funds because they allow them to grow their investments against inflation while reducing risk.
A study found that building financial security for the family and hedging against inflation are some of the top motivators for women to start their financial journey. Women investing in mutual funds through SIPs can expedite the progress of financial products and create long-term wealth.
In India, several key reasons encourage women to invest more in mutual funds:
Table of contents [Show] 1. Financial Independence | Women are increasingly seeking financial independence, and mutual funds provide a relatively accessible and manageable way to invest and grow their wealth. |
2. Long-Term Wealth Creation | Mutual funds offer the potential for long-term wealth creation, making them attractive to women who are looking to secure their financial future, especially in the context of retirement planning or other life goals. |
3. Professional Fund Management | Many women appreciate the expertise of professional fund managers managing mutual funds. This allows them to benefit from the skills and knowledge of financial experts, even if they may not have extensive experience in investing. |
4. Diversification | Mutual funds invest in a diversified portfolio of assets, spreading the risk. This diversification is appealing to women who may prefer a more balanced and less risky approach to investing compared to putting all their money into individual stocks. |
5. Ease of Investment | Mutual funds offer a convenient and hassle-free way to invest. Women, often juggling multiple responsibilities, find the simplicity of investing through systematic investment plans (SIPs) or lump-sum investments attractive. |
6. Growing Financial Awareness | With growing awareness and a shift in societal attitudes, more women are actively seeking ways to grow their wealth. As financial literacy increases, so does the inclination of women to explore and invest in mutual funds as part of their overall financial strategy. |
7. Goal-Based Investing | Mutual funds can be aligned with certain financial goals, such as buying a home, funding education, or starting a business. This goal-based approach resonates with women who prefer a structured investment strategy. |
8. Risk Tolerance and Stability | Mutual funds often offer a variety of options with varying risk profiles. Women, who may be more risk-averse, can choose funds that align with their risk tolerance, providing a sense of stability in their investment journey. |
9. Tax Efficiency | Certain mutual funds, such as Equity Linked Saving Schemes (ELSS), offer tax benefits under Section 80C of the IT Act. This tax efficiency is a motivating factor for women investors. |
