However, the question arises that why despite being temperamentally better equipped at handling finances, are women not at par with men when it comes to taking investment decisions?
Financial Autonomy
According to research conducted by The International Centre for Research on Women –
“A woman is economically empowered when she has both the ability to succeed and advance economically and the power to make and act on economic decisions.” Lack of autonomy and financial agency are the primary factors behind women not participating equally in investment decisions.
According to a Further, a CRISIL and AMFI study observed that self-employed women are more likely to make their own financial decisions (55%) than salaried women (39%). The study highlights that women who regularly make decisions find it more comfortable to invest their surpluses. It also found out that women’s financial autonomy varies by income source, age, and affluence. Financial independence rises with age— 65% of women over age 45 manage finances themselves. Likewise, 58% of affluent women display higher autonomy compared to 38% of semi-affluent women, apparently due to greater literacy and resources.
Financial Literacy and Knowledge
In the recent past, financial awareness among Indian women has increased, leading to a rise in investment activities. Although the percentage of women investors has remained steady over six years, their share of industry assets increased from 15% in March 2017 to almost 21% by December 2023. This growth is especially significant in B-30 cities, where women’s asset share rose from 17% to 28%. But women still have a long way to go in making smart investment choices. A CRISIL DBS report observed that, women in India allocate 51% of their funds to fixed deposits and savings accounts, compared to general households that invest 46% in the same tools. Likewise, they invest 15% in capital markets, versus 8.4% for households. Therefore, with a thorough understanding of investment options, related risks, and possible returns as discussed above, women are better equipped to create well-diversified and profitable investment portfolios.
Income Levels Influence Investment Capacity
There is a structural income gap between men and women, with women earning on average 17% less. To reach financial parity, women must save around 20% more, which reduces their disposable income. Lower salaries and career breaks further limit women’s earning potential and investment capital, often leading them to invest more conservatively than men.
Risk Tolerance
Risk appetite is shaped by financial goals, personality traits, lived experiences, and broader life responsibilities. In a predominantly male-dominated society, women receive delayed exposure to various financial aspects which impedes their risk appetite. Resultantly, women start their investment journey later than men. In a 2024 survey in the US, over 70% of women expressed a regret for not having started to invest their surplus savings earlier than they eventually did. In India, women’s risk-averse nature is reflected in the choice of investments. Women’s investment portfolios consist of mutual funds and the more traditional investment avenues, such as deposits, gold, and real estate.
In summary, women’s reputation for being risk-averse can be a significant advantage in building sustainable, long-term wealth. The power of compounding benefits those who practice persistence and patience—traits many women exhibit. By increasing financial literacy and making informed decisions, women are well-positioned to create diverse, high-performing portfolios, underscoring the importance of their approach to securing financial success.
(The author is Chief Investment Officer, IndiaFirst Life Insurance Co)