More households have women at the centre of financial planning, and data support this transition, which is evidenced over the last five years. One in four mutual fund investors in the country is a woman investor.
The narrative is not just about increasing women’s participation in investing, but one about how women are approaching investing in their choice of asset classes and scheme categories.
If you are a woman making your own investment decisions, you are more likely to be thorough and diligent about the framework you use to invest. You would like to set down your investing goals, understand the market to map the investment options that are available to meet your goals and your risk appetite, and, where needed, not hesitate to approach a trusted advisor to guide you through your investment journey.
While this may appear complex and time-consuming, you would also like to participate in the markets even as you refine your investment choices.
That is where passive investing, that is, investing in index funds and ETFs, is a practical starting point. Low cost, rules-based, makes passive investing a suitable vehicle, not just for building the core part of one’s investment portfolio, but also to participate in narrow themes like sector or theme-based investing. According to recent AMFI data, passive funds now manage close to ₹15 lakh crore in assets, with investor interest in this kind of low-cost, rules-based passive investing only growing month after month.
This growth is not confined to any one category, like say the Nifty 100 index. Investors are allocating to sector-specific indices, across commodity indices like Gold and Silver and to theme-based drivers of returns like value or quality.
From investing to financial planning – how the definition of empowerment has changed
India’s digital public infrastructure, the unique digital identifier to the Unified Payments Interface, combined with the emergence of various fintech platforms, has empowered women to make investment decisions.
But access alone is not a marker of the empowered woman investor in India today. Empowerment is demonstrated in her ability to allocate money in a manner that best meets her financial goals. Those goals could span the spectrum from funding a much dreamt-about holiday, buying that new EV, putting away money to fund that postgraduate course, children’s education, or health and retirement security. The objective is to provide cash flows for living her dreams and funding life stages.
In passive funds, across various index funds and ETFs, a woman would find this avenue attractive because it is rules‑based in portfolio construction and low‑cost in portfolio access.
Passive Strategies for Women Investors
A broad-based equity index fund or ETF, tracking the Nifty 100 Index or the Nifty 50 index (investing in the bluechip, largecap stocks), can serve as a foundational layer for participating in the economic growth story of India. This can form a stable core aligned with long-term financial goals.
Factor-based passive strategies, that is, investment in indices or benchmarks that focus on a specific return driver of stocks, may be worth considering for pursuing preferred styles of investing. These Indices are built around characteristics such as value, quality, low volatility or momentum. For example, if you think the Indian markets are overvalued, you may choose your preference to value by investing in a scheme tracking the Nifty 500 Value 50 Index. If you would like to participate in the popular trends that are underway, you could choose the Nifty 500 Momentum 50 index. The factor-based strategies help you add your own style preference when you build your investment portfolio.
Gold and silver have the same place in our hearts as they did for the generations of women before us. In your investment portfolio, you can find a place through gold or silver ETFs or a fund of funds. Invested in the right proportion, they serve as an effective hedge to the volatility that equity as an asset class can bring to your portfolio in uncertain times.
There are index funds with only fixed-income instruments like bonds as the underlying. Some of these indices have a predefined maturity date, akin to the maturity date of a bank fixed deposit that you may be familiar with. These funds help us meet our near term financial goals, where one can choose funds which have a maturity period matching our investment horizon to meet our near term goals.
Finally, systematic allocation into passive funds, via the SIP route, drives home discipline, rupee cost averaging and consistency in the investment journey are advantages for any investor. Regular investments through SIPs into index funds or ETFs allow investors to build exposure gradually, reducing the noise around timing and encashing of investments in response to everyday news flow.
Conclusion
Women in India are already controlling more wealth, investing in more equity, and owning a larger share per folio of mutual fund investment than ever in the past. The change is visible not just in published data but in sharper allocation choices, greater cost awareness and a clearer focus on long-term resilience. Investing by women is more deliberate and structured.
Index funds offer women investors a simple way to translate those unique strengths into intelligent investment choices. They provide a foundation that can adapt as goals evolve and responsibilities expand. As more women shape their financial futures with clarity and discipline, the investment choices that women make become a reflection of independence.
(The author is Vandana Trivedi, Head – Institutional Sales & Passives Axis AMC)
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times.)
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