Stocks, Savings, More: How Millennial Women Invest Their Money

Although the Covid-19 pandemic and subsequent lockdowns led to uncertainties and job losses, it also paved the way for a new trend among millennial women in the country.

The equity and mutual fund markets saw increasing participation from millennial women investors in the last three years, According to a ClearTax report.

Around 24 per cent of new investors on the ClearTax platform were females in the calendar year (CY) 2019. It increased to nearly 30 per cent in the CY 2020 and retained similar figures in 2021.

Moreover, women accounted for 20 per cent of the total value of investments on the platform in CY 2020. It increased to nearly 28 per cent of the total investment value in CY 2021, according to the report.

After the lockdown, millennial women invested in equity funds and stocks as the widespread availability of financial apps and other technology tools helped them research and pick suitable mutual funds and stocks. They invested in fundamentally-strong stocks during the lockdown, it said.

Female investors accounted for 22 per cent of total investors on the platform in CY 2019, it jumped to 24 per cent in CY 2020.

The calendar year 2021 saw a jump of 40 per cent in the number of new investors on the platform from the previous year.

The female investors currently account for 26 per cent of the total investors on the platform.

"Women are cautious and follow a disciplined approach to investing. For example, women prefer to invest in equity funds through systematic investment plans (SIP). It is a method of regularly investing small amounts in mutual funds and helps you avoid timing the stock market. Moreover, women are less likely to stop their SIPs during a stock market correction which is the best approach to generate wealth over time," the report said.

Many women invested most of their savings in bank FDs followed by small saving schemes like PPF and post office saving schemes.

However, many millennial women prefer equity investments post the lockdown. Several of them shifted to direct equity funds rather than stocks.

Women prefer diversified equity funds because of diversification across sectors and industries coupled with the facility of SIP investment.

The report says several women from tier 2 and tier 3 cities learned the ropes of stocks and mutual fund investments during the lockdown.

Millennial female investors also invested in Equity Linked Savings Scheme (ELSS).

The ClearTax platform saw an increase in the number of new female investors in ELSS from 25 per cent in CY 2019 to around 31 per cent in CY 2020.

Moreover, female investors accounted for 31 per cent of the total new investors on the platform in CY 2021. They currently account for 25 per cent of total investors in ELSS.