The widespread availability of financial apps and other technology tools helped women research and pick suitable mutual funds and stocks.
The pandemic and the subsequent lockdown forced Indians, especially women, to juggle their family responsibilities and work life. However, despite the economic downturn leading to job losses and pay cuts, one of the positives to emerge was the increasing participation of women in equity investments.
ClearTax, on its platform, saw significant growth in the number of female investors – For instance, around 24 per cent of new investors were females in the calendar year 2019. It increased to nearly 30 per cent in the calendar year 2020 and retained similar figures for the calendar year 2021.
Archit Gupta, CEO and Founder of Clear says, “The pandemic-induced uncertainties led to a slump in the Indian real estate market while several investors ditched bank FDs in the low-interest rate regime. It forced people to look at equity funds and stocks as an alternative even as the Sensex and Nifty 50 surged after the lockdown.”
After the lockdown, many millennial women invested in equity funds and stocks to support their spouses in challenging economic conditions. Moreover, “the widespread availability of financial apps and other technology tools helped women research and pick suitable mutual funds and stocks,” adds Gupta.
Experts say, women, function as investors and not traders when it comes to stocks. Hence, many millennial women invested in fundamentally-strong stocks available at a massive discount during the lockdown.
Studies have also shown that more women chose equity investments after the lockdown in 2020. For example, in an online investment platform, female investors accounted for 22 per cent of total investors in the Calendar Year 2019. However, female investors jumped to 24 per cent of the total investors on the platform in the Calendar Year 2020.
Additionally, Gupta points out, “the calendar year 2021 saw a massive jump of 40 per cent in the number of new investors on the platform from the previous year. Moreover, female investors currently account for 26 per cent of the total investors on the platform.”
According to industry data, many women invested most of their savings in bank FDs followed by small saving schemes like PPF and post office saving schemes. However, many millennial women prefer equity investments post the lockdown. For instance, according to Gupta, a lot of millennial women have shifted to direct equity funds rather than stocks because of its slow and steady approach to wealth building over time.
“Women prefer diversified equity funds because of diversification across sectors and industries coupled with the facility of SIP investment. It helps them invest small amounts rather than wait to accumulate a lump sum to commence their investments,” explains Gupta.
Experts say women choose investments to achieve child based goals such as education for children or accumulating a corpus for their marriage. Keep in mind, investing in equity funds over the long term can generate inflation-beating returns helping you to get to your financial goals.