- Date : 06/06/2022
- Read: 5 mins
The Covid-19 lockdown pushed women to start investing and be the owner of their money. While every woman had their preferred option, mutual fund was the dominant choice of most women. Interestingly, most women who were investing for the first time were home-makers.
The Covid-19 pandemic was new for everyone. Nobody knew what it was like to be under lockdown. The lockdown gave people time to do something they had never done. Some people learned to cook, and some learned to discover their creative selves, while others learned to invest. Many women started investing for the first time. And as the saying goes, it is better late than never.
For women, the key to post-pandemic recovery seemed to be an investment. Pay cuts and job losses of their spouses pushed women to be economically independent and lend a helping hand in sharing and managing household expenses.
Also Read: COVID-19 is changing investor behaviour. Here's how!
Although the women professionally involved in the banking sector are aware of the risk and return involved in investment. But, it was overwhelming to see home-makers coming out of their comfort zone and doing financial planning. Taking one’s own financial decision brings confidence and empowers a person.
Compared to the previous year, 2020 had more women investors. The percentage of women actively involved in investing rose by 10%.
Towards the initial days of the pandemic, women started investing in stocks that aligned with their interests. But as investment and return are irrespective of gender; and men and women get the same risk and return, 21% of women are now investing in stocks.
So, let's see, how women started investing in the equity markets and gained a lot.
Systematic Investment Plan
Women are cautious investors, and most of them prefer investing through a Systematic Investment Plan (SIP) which falls under Mutual Funds. With SIP, one can regularly invest small amounts in mutual funds. Women are also less likely to abandon their Systematic Investment Plan during a stock market collapse, which is the most effective approach to create wealth over time. The investment amount of a SIP can be as low as ₹500. The SIP interval can be weekly, monthly, quarterly, semi-annually or annually.
With a systematic Investment Plan, women no longer have to worry about equity market dynamics and long-term benefits. During the Covid-19, women inclined more toward Mutual Funds or Systematic Investment Plans for their compounding power and low-cost investment. In a SIP, you can either invest for the long term or short term. Last year, 36% of women invested in Mutual Funds. There are two types of mutual funds: actively managed and passively managed funds. Unlike banks, mutual funds do not have any NPA.
And the profit is calculated not only on the investment amount, but also on the gain made on the investment amount. In this way, the return also ultimately earns a return. What’s best? There’s limited or no risk to investing in the Best Arbitrage Fund.
Also Read: 4 Reasons to stay invested in SIPs even during the pandemic
Exchange Traded Fund
ETF is a kind of investment fund and exchange-traded product that is only sold on stock exchanges. ETF is almost similar to MF. Last year, after the Covid-19, the number of women ETF doubled. Women like to invest more in ETF due to its low investment cost; one can buy and sell as minimum as one unit. Usually, the expense ratio of an ETF is less than 1%.
Also Read: Best ETFs to invest in India
Index Fund
Index Fund is also a type of ETF with broad market diversification, low cost, and attractive return. Anyone can purchase an index Fund through any Mutual Fund Company.
Systematic Withdrawal Plan
A Systematic Withdrawal Plan (SWP) is a service offered by mutual funds that allow an investor to withdraw money from the MF at a predetermined interval. Women investors are more interested in SWP as it provides a regular flow of income from the investments. The idea of SWP is to ensure that both investment and withdrawal are made in a controlled way. Most women required liquidity during the Covid-19, and SWP allowed them to access their money whenever they needed it.
Also Read: A guide to systematic withdrawal plans
Alternative Investment Funds
Alternative Investment Funds (AIF) are those investment options that do not fall under traditional investment methods, such as bonds, cash, etc. An AIF can include hedge funds, real estate, venture capital, SME funds, infrastructure funds, and tangible commodities. These privately pooled investment options in India saw a jump in 38% of women investors last year. However, investing in AIF is a matter of risk, as there is no government reliability. The Securities and Exchange Board of India (SEBI) has declared the minimum limit to investing in AIF as ₹1 crore to inform investors of the underlying risk involved in AIF.
Also Read: Don't want to go the traditional way? Try these alternate investment options
Women have always been outnumbered in financial planning and asset generation. But, now, female participation in the equity markets has increased. In 2021, the percentage of women who have an equal say in financial planning and their husbands doubled from 33% to 70%. The pandemic motivated women to reduce the gender gap, save money and make investments.
While looking for alternatives to decrease the FD rates during the pandemic, women indulged in investing. There has been a surge in the number of women investors to make some extra money. Although initially, women who are not from the banking sector had zero ideas about mutual funds, SIP, SWP, or index funds and educated themselves about investment. In contrast, 30% of women still rely on digital platforms for investing.
The Covid-19 pandemic was new for everyone. Nobody knew what it was like to be under lockdown. The lockdown gave people time to do something they had never done. Some people learned to cook, and some learned to discover their creative selves, while others learned to invest. Many women started investing for the first time. And as the saying goes, it is better late than never.
For women, the key to post-pandemic recovery seemed to be an investment. Pay cuts and job losses of their spouses pushed women to be economically independent and lend a helping hand in sharing and managing household expenses.
Also Read: COVID-19 is changing investor behaviour. Here's how!
Although the women professionally involved in the banking sector are aware of the risk and return involved in investment. But, it was overwhelming to see home-makers coming out of their comfort zone and doing financial planning. Taking one’s own financial decision brings confidence and empowers a person.
Compared to the previous year, 2020 had more women investors. The percentage of women actively involved in investing rose by 10%.
Towards the initial days of the pandemic, women started investing in stocks that aligned with their interests. But as investment and return are irrespective of gender; and men and women get the same risk and return, 21% of women are now investing in stocks.
So, let's see, how women started investing in the equity markets and gained a lot.
Systematic Investment Plan
Women are cautious investors, and most of them prefer investing through a Systematic Investment Plan (SIP) which falls under Mutual Funds. With SIP, one can regularly invest small amounts in mutual funds. Women are also less likely to abandon their Systematic Investment Plan during a stock market collapse, which is the most effective approach to create wealth over time. The investment amount of a SIP can be as low as ₹500. The SIP interval can be weekly, monthly, quarterly, semi-annually or annually.
With a systematic Investment Plan, women no longer have to worry about equity market dynamics and long-term benefits. During the Covid-19, women inclined more toward Mutual Funds or Systematic Investment Plans for their compounding power and low-cost investment. In a SIP, you can either invest for the long term or short term. Last year, 36% of women invested in Mutual Funds. There are two types of mutual funds: actively managed and passively managed funds. Unlike banks, mutual funds do not have any NPA.
And the profit is calculated not only on the investment amount, but also on the gain made on the investment amount. In this way, the return also ultimately earns a return. What’s best? There’s limited or no risk to investing in the Best Arbitrage Fund.
Also Read: 4 Reasons to stay invested in SIPs even during the pandemic
Exchange Traded Fund
ETF is a kind of investment fund and exchange-traded product that is only sold on stock exchanges. ETF is almost similar to MF. Last year, after the Covid-19, the number of women ETF doubled. Women like to invest more in ETF due to its low investment cost; one can buy and sell as minimum as one unit. Usually, the expense ratio of an ETF is less than 1%.
Also Read: Best ETFs to invest in India
Index Fund
Index Fund is also a type of ETF with broad market diversification, low cost, and attractive return. Anyone can purchase an index Fund through any Mutual Fund Company.
Systematic Withdrawal Plan
A Systematic Withdrawal Plan (SWP) is a service offered by mutual funds that allow an investor to withdraw money from the MF at a predetermined interval. Women investors are more interested in SWP as it provides a regular flow of income from the investments. The idea of SWP is to ensure that both investment and withdrawal are made in a controlled way. Most women required liquidity during the Covid-19, and SWP allowed them to access their money whenever they needed it.
Also Read: A guide to systematic withdrawal plans
Alternative Investment Funds
Alternative Investment Funds (AIF) are those investment options that do not fall under traditional investment methods, such as bonds, cash, etc. An AIF can include hedge funds, real estate, venture capital, SME funds, infrastructure funds, and tangible commodities. These privately pooled investment options in India saw a jump in 38% of women investors last year. However, investing in AIF is a matter of risk, as there is no government reliability. The Securities and Exchange Board of India (SEBI) has declared the minimum limit to investing in AIF as ₹1 crore to inform investors of the underlying risk involved in AIF.
Also Read: Don't want to go the traditional way? Try these alternate investment options
Women have always been outnumbered in financial planning and asset generation. But, now, female participation in the equity markets has increased. In 2021, the percentage of women who have an equal say in financial planning and their husbands doubled from 33% to 70%. The pandemic motivated women to reduce the gender gap, save money and make investments.
While looking for alternatives to decrease the FD rates during the pandemic, women indulged in investing. There has been a surge in the number of women investors to make some extra money. Although initially, women who are not from the banking sector had zero ideas about mutual funds, SIP, SWP, or index funds and educated themselves about investment. In contrast, 30% of women still rely on digital platforms for investing.
