5 Minutes Read
Women’s participation in investment assets grows, but gender gap persists
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
Listen to the Article (6 Minutes)
Summary
While women’s participation in investment assets has seen progress, there are still significant challenges to overcome. By addressing issues such as fear, lack of support, financial literacy, and the gender pay gap, stakeholders can work towards creating a more inclusive and equitable investment landscape for women.
The participation of women in investment assets has been steadily increasing, according to data from the Association of Mutual Funds in India (AMFI). However, despite this growth, women’s involvement in financial assets remains relatively low compared to their male counterparts. Several key factors contribute to this phenomenon, including fear, lack of support, and financial literacy.
Ridhi Doongursee, co-founder of LXME, highlights the prevalent fear among women regarding investing in capital markets, often stemming from past negative experiences or perceptions of risk. Additionally, societal judgments and the absence of supportive environments further deter women from actively managing their finances. Moreover, time constraints due to familial responsibilities exacerbate the issue, leaving women with limited opportunities to educate themselves about financial matters.
Despite challenges, there is a promising trend of increasing female participation, particularly in inflation-beating assets, indicating a positive shift in the right direction.
Hena Mehta, Co-Founder & CEO of Basis, acknowledges the progress made in recent years, citing a significant increase in the number of women investing in mutual funds. “Just in the last three to four years since 2019, the number of women investing in mutual funds has increased between 58 to 60%. So we are making progress. Within the Basis community as well, about 50-55% of women started investing after joining the Basis platform because they finally got the knowledge they needed, trust gaps were filled, they got the confidence etc. So we do have a lot of work to do.
However, we are seeing data that is promising, that’s telling us that we’re headed in the right direction and more women are participating in inflation beating assets and growing their wealth for the long term,” Mehta stated in a discussion with CNBC-TV18.
The demographic breakdown reveals that a significant portion of women investors falls within the 25-44 age group, indicating a growing interest among younger generations. Additionally, most women prefer the regular plan route in mutual funds and tend to stay invested for longer periods, reflecting a cautious yet committed approach to investment.
However, Priya Sunder, co-founder and director of Peak Alpha Investments, brings attention to the persistent gender pay gap as a fundamental barrier to women’s financial empowerment. The disparity in earnings results in smaller investment sizes and delayed wealth accumulation, perpetuating a cycle of financial disadvantage for women. Addressing the gender pay gap and supporting women through career transitions are essential steps toward fostering equal opportunities in investment, she added.
The report was released as a part of a special industry initiative for International Women’s Day, led by Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch and AMFI board members. The event celebrated women’s contributions to the investment industry, recognising fund managers, research analysts, and dealers for their achievements.
Watch the accompanying video for the entire discussion.
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