Investment Assets for Women in India: A Guide

Investing is not just a matter of earning money, but also a way of achieving financial independence, security, and empowerment. Women in India have traditionally been less involved in investing than men, due to various factors such as lack of awareness, confidence, access, or social norms. According to a report by Morningstar India, out of the 473 fund managers in the mutual fund industry, only 42 are women, managing approximately Rs 6.66 lakh crore of assets. This shows that women are still under-represented in the investment sector, but also that they have the potential and capability to manage large sums of money. However, this scenario is changing rapidly, as more and more women are taking charge of their finances and exploring various investment options.

“Indian women have transcended barriers in every field, and it’s crucial they have equal access to financial tools and knowledge. Being financially independent is more than just a phrase for women; it is a means of securing their own future. Knowledge is key, and financial literacy is the first step towards an independent future. Learn about compound interest, debt management and budgeting. Explore investment options that match your goals. PPF (Public Provident Fund) provides safe, tax-advantaged returns. Mutual funds offer both growth potential and diversification. Investing is planting the seeds of a future in which you will not only survive but also prosper financially. Embrace financial freedom as your superpower; learn, invest and watch your desires come true without limits,” says Ramneek Singh Ghotra, Chief Growth Officer, Finvasia.

Popular investment assets for women in India include mutual funds and stocks, with over 80% favoring them for higher returns, tax benefits, and flexibility. These pooled investment vehicles offer diversification and various categories to cater to different risk profiles and goals. Shares, representing ownership in a company, attract women investors for long-term wealth building, capital appreciation, and dividends, especially those with a high-risk appetite and interest in the stock market. Another popular investment option for women is gold, whether in physical or digital form, which serves as a safe haven, inflation hedge, and status symbol, making it suitable for low-risk investors with a medium to long time horizon. Real estate, a tangible asset providing stability, durability, and prestige, is favored by women with a high-risk appetite, a very long time horizon, and substantial capital. These diverse investment options empower women to build wealth aligned with their financial goals and preferences.

RajashreeNambiar, Co-Founder, MD & CEO, Ecofy, observes a steady increase in the participation of women in the financial markets. She says, “As a long-time observer of financial trends in India, I have seen a growing sense of financial empowerment among women. While risk aversion is often observed, it’s crucial to recognise the nuances. Women prioritise security for themselves and their families, and this is reflected in their preference for low-risk instruments like fixed deposits and gold. However, it’s essential to consider the long-term. While traditional instruments provide stability, they may not always outpace inflation, hindering wealth creation. Here, I see a significant opportunity.”

She continues, “The Government too has introduced various discounts and schemes tailored for women. A notable trend is a surge in women borrowers for home loans, and hence many financial institutions are coming up with multiple schemes, right from easy finance, liberalised eligibility criteria, low-interest rates, and low processing fees to quick approvals. As women gain financial confidence, exploring investment options that align with their values can be incredibly empowering. At Ecofy, we empower individuals and businesses to invest in a sustainable future, creating a win-win scenario for financial well-being and environmental impact through our segments. This empowers women to become not just financially secure, but also active participants in shaping a greener future.”

Choosing the right investment assets for women in India involves careful consideration of factors such as risk appetite, time horizon, and diversification. Assessing risk appetite based on age, income, and goals is crucial – younger individuals with stable income may opt for higher-risk equity investments for long-term wealth growth, while older individuals with fixed income may prefer lower-risk fixed income or allocation assets for wealth preservation. Time horizon plays a key role, with longer durations allowing for higher returns but also higher volatility. For short-term goals, liquid assets are suitable, while long-term goals benefit from growth assets. Diversification across various assets, sectors, and strategies helps mitigate overall portfolio risk. High-risk profiles may diversify into global equity funds and ETFs, while low-risk profiles could consider a mix of bank deposits, insurance, and bonds. Customizing portfolios based on individual financial circumstances ensures a well-rounded and resilient investment strategy. A comprehensive knowledge about these factors can be gained through financial literacy.

Mehak Srivastava, Head of Marketing at SahiBandhu, a leading gold loan aggregator platform, underscores the pivotal role of financial literacy in empowering Indian women towards financial independence. “Financial literacy is crucial for Indian women to make informed financial decisions. Top investment assets include equities, mutual funds, and the traditional yellow metal, gold. Owning gold can lead to financial self-sufficiency for a woman. As a tangible asset, gold holds intrinsic value and is not subject to depreciation like other assets. It can be sold or pledged as collateral for loans, providing financial security and independence. Secondly, gold can empower women by providing a sense of financial control. In many societies, women take a backseat while families make financial decisions for the house. However, owning gold can give them a stake in these decisions, increasing their confidence and autonomy. Thirdly, in emergencies, gold can be easily liquidated or used to secure a gold loan, providing immediate financial relief. Gold loans are popular in India due to their quick processing times, minimal documentation, and lower interest rates than personal loans,” she says.

Mehak adds, “Gold investment not only provides financial security but also empowers women by making them financially self-sufficient and capable of handling emergencies. Emerging trends and innovations in personal investments like gold include several notable developments. Digital gold, Sovereign gold bonds (SGBs), and gold exchange-traded funds (ETFs) are amongst the most prominent options for gold investment for women. These innovative trends manifest the dynamic nature of personal gold investments. SahiBandhu encourages financial literacy among women, guiding them to leverage these contemporary avenues. At SahiBandhu, our commitment is not just helping to aid the good loan process but also to spread financial literacy around gold so that women get empowered to make informed investment decisions, capitalizing on the enduring appeal of gold as a steadfast and evergreen asset class for sustained financial independence.”

While there are numerous investment options available to women in today’s day and age, it is important to remember that investing is not a one-size-fits-all approach, but a personalised and dynamic process that requires research, planning, monitoring, and review. By investing wisely and regularly, women can achieve their financial goals and aspirations and also contribute to the economic growth and development of the country.