Don't Believe these Myths that Limit Women

Investing in the Real Laxmi: Women and Mutual Fund Investing

Financial disadvantages for women are among the biggest struggles of our times. From lower wages to property rights, world over, women are not empowered enough. Mutual fund investing is yet another dimension where the inequality strikes hard. Look around. It is the ladies who manage household finances. Not just home finance, a lady’s influence often plays a key role in shaping entire families. The woman of the house is the family’s real Laxmi: managing life’s rough and tumble, and leading families to achieving great things. Yet, women are far behind men on financial independence. Mutual funds bring financial freedom; it is odd that women still don’t have their fair share in mutual fund investing.

Whether it is saving for a rainy day, planning for a child’s education, building long-term wealth or even retirement, mutual funds provide multiple solutions. Awareness among women on the security and effectiveness of mutual funds as an investment choice is low.(see figure 1 below)

Bouquet of choices

A recent survey suggests that amongst mutual funds, women favor the equity asset class (*). While equity mutual funds are among the best options for long-term wealth-creation, there is a variety of investments to choose from. Besides stocks, there are bonds, and even gold and silver, too. Investors just have to match their investment needs with the risk and return aspects of each asset class.

Professional management

One of the major benefits of mutual funds is access to professional expertise. Direct investing with stocks or bonds is risky. How will a retail investor invest her family’s savings, and with very little knowledge of the complexities of the financial marketplace, find winners? Mutual funds are among the best answers. Asset management companies employ professional managers who have extensive expertise and deep market knowledge. This makes mutual funds a safer investment option for those who may not have sufficient financial knowhow.

Safety

The Securities and Exchange Board of India (SEBI) regulates India’s capital markets, including mutual funds. Protecting investor interest is among SEBI’s biggest mandates. SEBI also facilitates and organizes investor education initiatives. Under SEBI’s watchful eyes, the Indian capital markets, including mutual funds, have grown multifold over the last two decades plus. Take a look at some of SEBI’s videos here. The videos are entertaining as they reflect on the easy gullibility in investing.

Laxmi-For-Laxmi

India has experienced rapid economic progress, resulting in increased wealth. Over the past decade, mutual fund investments have grown fivefold, reaching 39 lakh crore rupees as of January 2023 (**). However, it's important to ask whether women in India have equally benefitted from this growth. To manage household needs, the ladies of the house have been using the “Barni” – a ceramic jar for saving money. Instead, it is time that the Laxmis of the house stand up for themselves and consider using mutual funds as a wealth management choice.

Mutual funds represent an untapped opportunity for wealth creation, particularly for women. With their low investment requirements, mutual funds can be an empowering tool for women with varying incomes. By investing through mutual funds, women are better positioned to grow their wealth and build a financial foundation for themselves and their families.

* CAMS study, 2022

** AMFI, 2023

Table 1

The information contained in this document is for general purposes only and not an investment advice. Readers should seek professional advice before taking any investment related decisions.

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