- Date : 30/12/2021
- Read: 4 mins
Millions of women are on the course of busting the myth that they lack the knowledge or temperament to invest in stock markets, leading the way for the next generation of financially savvy women.
Women continue to remain under-represented across various domains, and the capital markets are no different. Lack of access to financial and tech resources, in addition to gender bias, has been the biggest roadblock for women.
While it may still take a while for women to reach the same levels of participation in financial markets, slowly but surely, things are changing. With increasing education levels, improving job prospects and a fierce need to become financially independent, a significant number of women across age groups are getting captivated by the wealth-generating capabilities of equity assets.
What has changed?
The period of lockdown in 2020 has served as a tipping point with respect to the growth of women investors in the equity markets. Many have utilised their time during the lockdown to upgrade their investment knowledge and skills.
Brokerage firm Sharekhan registered a 77% growth in the number of women who opened a Demat account in January 2021, compared to the previous year, while Zerodha has almost seen a 100% jump from 3.5 lakh female investors last year to 7.2 lakh in 2021. Most broking houses say their female clientele has grown by 50% to 75% in 2020 alone. Surprisingly, a large number of these women are married and from tier II and III cities like Jabalpur, Bhubaneshwar, Dehradun, Mysuru, etc.
According to Capstone consulting, 35% of the new trading accounts of women are being opened by housewives, which signals a major shift in investment behaviour for the category. Today, 67% of married women are actively participating in financial decision making along with their spouses, up from 33%, whereas 21% of these women are more than happy to take complete charge of all financial decisions, as per a Scripbox survey.
Several women who were unemployed, on a career break or making some money through a side hustle realised that they could earn significantly more with active trading. Many of these women have taken up investing as a full-time profession. Not only are they able to become financially independent, but they are also able to contribute to the overall family income.
As per a survey by Groww, 50% of all women are investing in capital markets to achieve personal financial goals, 43% want an income source to support the family, 64% want to give their children a great education, and 25% of the women hope to pursue their travel dreams. The long-term growth and compounding effect of equity assets are giving women the inspiration to make not only a shift in investment pattern but, in some cases, a promising new career.
How are women investing?
Women tend to make great fundamental investors. The need to undertake research, talk to experts and engage with the community holds them in good stead when making critical investment choices. Women are a lot more disciplined in their approach and avoid unnecessary risks. This is one of the reasons the starting ticket size is lower compared to men.
However, as the technical know-how, understanding of risk, volatility and confidence improve, women commit more resources over a period of time. The average portfolio returns of women investors over a 10-year period has been 0.4% better than men as per a Fidelity Investments study. A systematic approach coupled with a buy-and-hold strategy, versus frequent churning, helps women outshine.
Last year in 2020, women did significantly better. Their portfolios generated 14%, while men were only able to earn a little over 11%, as per an ETMoney study. With a strong investment strategy, women are also more likely to meet their financial goals. They are also demonstrating greater prudence with respect to retirement and tax planning.
Millions of women are on course, busting the myth that they lack the knowledge or temperament to invest in stock markets, leading the way for the next generation of financially savvy women.