Women investors better than men in mutual funds with long-term strategies: Report

A recent study conducted by Crisil and the Association of Mutual Funds in India (AMFI) has revealed a significant shift in mutual fund investments, favouring women investors. The data showed that women's assets under management (AUM) in mutual funds with holdings over five years have increased from 8.8% in March 2019 to 21.3% in March 2024. Comparatively, men recorded a growth from 8.2% to 19.9% over the same period. This indicates a substantial increase in female participation and commitment in the financial markets, highlighting their preference for long-term investment strategies. 

The inclination of women to hold investments for extended periods is further supported by the decreasing number of women investors holding mutual fund portfolios for less than a year, dropping from 40.5% in 2019 to 25.4% in 2024. In contrast, men holding short-term investments decreased to 27% from 42.1%. "Women investors are increasingly demonstrating patience and discipline in wealth creation," said Navneet Munot, chairman, AMFI. This commitment is evident in the gross flows where women investors' contributions surged by 56.5% to Rs 3.13 lakh crore, compared to a 41.7% increase to Rs 7.30 lakh crore for men.

Investment advisors attribute this trend to women's approach to investments, often less reactive to market fluctuations, leading to greater 'stickiness' in their portfolios. "Women don't monitor day-to-day movements in the stock market. This increases the stickiness of investments," Kavitha Menon, founder of Probitus Wealth, told the Economic Times. 

Additionally, the average folio size for women has grown by 24%, compared to just 6% for men over the past five years, reinforcing the impact of women's increasing participation in the workforce and investment markets.

The Periodic Labour Force Survey (PLFS) of June 2024 reports a rise in female workforce participation from 23.3% in 2017-18 to 41.7% in 2023-24. "More women are joining the workforce, saving money and subsequently investing it," said DP Singh, deputy managing director at SBI Mutual Fund. There is also a trend of businessmen investing in the names of female family members, further bolstering women's presence in mutual fund investments. "We are also seeing many businessmen investing in the names of their female family members, thereby leading to a growth in women investing," Singh added.

This growing trend of women in mutual funds not only showcases their increasing economic power but also reflects a societal shift towards recognising the financial longevity needed by women. "There is a growing realization that women tend to outlive men, which is encouraging them to save for the future," said Swarup Mohanty, Vice Chairman, Mirae Asset Mutual Fund. 

As women continue to build wealth and secure their financial futures, their influence on the mutual fund industry is expected to expand, reshaping investment landscapes.