Women investors: Capital preservers or risk takers?

Despite Indian women gaining financial freedom at a fast pace, the perception that women are inadequate at managing their finances and understanding investment opportunities remains unchanged. Why is that? Are women unsure of their financial decisions in a historically male-dominated domain or are they capital preservers and risk-averse which perpetuates a view that women do not have source-based knowledge? 

Apart from traditional gender roles, societal norms, and systemic biases, unconscious biases can affect how financial professionals interact with women, says Ishita Sawant, founder & CEO of Meolaa, an e-tailer. “These biases lead to assumptions about women's financial knowledge or capabilities, resulting in less inclusive discussions and limited opportunities for women to actively participate in family financial planning,” she adds. 

As per the Women & Money Power 2022 survey released by LXME, a financial platform for women, only 7% of women in India invest independently through self-learning. Another key finding reveals that 49% of women in the country are either not investing at all or are unaware of their investments. 

The survey was carried out among 4,000 women across various age groups, life stages and occupations in metros, tier II and III cities, in association with Axis My India. 

However, experts believe the trend is changing gradually and more women are taking charge of their finances. Research also indicates that it is not that women are financially-diffident but they tend to prioritise capital preservation and risk avoidance, often favouring safer yet potentially lower-return investments.

“Women are amazing investors, it's just that they view investments very differently with the convention,” says Siddharth Alok, senior management & investment counsellor, Epsilon Money. 

He adds, “Women, traditionally, believe that safety and security come first, and this is the reason why their primary investments comprise gold and bank deposits.” 

It is to be noted that India holds one of the largest reserves in gold only because Indian women account for about 10-11% of the world’s total gold reserves. 

Moreover, women are evolving their financial outlook from savings to investment in 2023. As per the Economic Survey 2023, women in India look at investing as an integral way to achieve financial security and independence. 

What’s driving this change? Along with higher income, information is now easily accessible to women through a myriad of digital channels. India’s deep internet penetration, growing smartphone adoption, and an explosion of startups focussing on democratising wealth have encouraged more and more women to confidently pursue their investment choices. 

“Women make some of the best investors as they are more patient, and resilient, and tend to stick with their choices for the longer term. Confidence comes when armed with information and after dabbling a bit with various options, women are slowly getting there,” says Archit Gupta, founder & CEO, ClearTax. 

Women are temperamentally sound investors and also excellent money managers when it comes to household savings and expenses – and their proficiency at managing their home finances is gradually extending to the personal financial planning front as well.