Among the most notable trends in the equity market is the surge in women investors, whose participation has grown 6.8 times since 2015
The Indian equity market has radically transformed over the past two decades. The advent of smartphones, digital trading platforms, and increased financial literacy has ushered in a new era of investors — young, financially aware, and open to taking calculated risks. Recent data from the National Stock Exchange (NSE) reveals that women now constitute over 22 per cent of equity market investors in India, a 6.8X growth since 2015.
This surge in female participation is particularly noteworthy given the tepid adoption of demat trading in its early days. It could be attributed to women enjoying greater financial independence, a growing interest in equities, and a disciplined approach to sustainable wealth creation. The rise in women’s financial awareness has also been a critical driver of this growth. A study by CRISIL and DBS found that 47 per cent of women now make independent financial decisions.
This newfound autonomy is reflected in the increasing number of women investing in mutual funds. According to AMFI data, women’s share in industry AUM rose to nearly 21 per cent by the end of December 2023, against 15.2 per cent in March 2017. Importantly, this trend is not limited to major cities; women in smaller towns show equal enthusiasm for capital market investments.
However, the same CRISIL and DBS study revealed that women still allocate 51 per cent of their investable assets to fixed deposits and savings bank accounts, 16 per cent to gold, 15 per cent to mutual funds, 10 per cent to real estate, and just 7 per cent of their investible corpus—being the least preferred option. Given the proven potential for substantial market returns, women’s risk-averse attitude towards equities is particularly perplexing.
Over the past five years, benchmark indices have delivered over 100 per cent returns. For instance, based on a daily rolling return analysis, the Nifty 50 Total Returns Index has shown positive returns of approximately 93 per cent over three years.
These double-digit returns from long-term equity investments have far outpaced the single-digit interest rates offered by traditional savings accounts and fixed deposits. However, women tend to be cautious when it comes to equities. The potential impact of increased women’s participation in equity markets is substantial. A BCG study found that women contribute $5 trillion annually to the global wealth pool. Encouraging more significant equity investment among women and prudent risk management practices is crucial for building a stronger financial future for individuals and the nation.
Regulators are already implementing measures to create a safe and transparent market environment for women investors. For instance, initiatives like the Women’s Investor Awareness Programme actively educate and empower women by simplifying stock market concepts and encouraging them to take control of their financial futures. Simultaneously, the industry complements these efforts by developing accessible and informative content in regional languages and diverse formats, such as podcasts and video tutorials, to make complex financial concepts easier to understand. Women themselves must actively participate in the stock market by engaging in discussions, seeking knowledge, and taking the initiative to invest. Starting with a systematic investment plan is a smart approach to building wealth over time. Additionally, consulting financial experts can help women navigate the market with confidence. It is time for women to seize this opportunity, take control, invest wisely, and contribute to rebuilding a more equitable and financially robust India.
(The writer is Director & Chief Business Officer at m.Stock by Mirae Asset Capital Markets; views are personal)
