Paving way for financial empowerment with Mutual Funds

Over the past few years, women have emerged as active and deliberate investors, reshaping the mutual fund industry’s dynamics. This shift is not just a trend but a significant societal evolution. AMFI data for 2022-2023 reveals a groundbreaking influx of 27.50 lakh women investors into the mutual fund arena over the last three years. This rapidly increasing involvement of women in finance symbolizes their growing economic stature. It also underscores the importance of International Women's Day as a celebration of their financial empowerment and independence.

Women today are not just managing household budgets but are actively shaping their financial futures. In this evolving landscape, mutual funds emerge as a robust tool, tailor-made for the discerning woman investor seeking both growth and stability. The fast-evolving Mutual Fund landscape in India offers multiple wealth creation opportunities for women across several instruments with the intention of capital appreciation and earning reasonable returns in the long run. They can invest basis their needs, end objectives, ability to bear risks, investment corpus etc. and even alter their plans as and when the requirement changes.

SIP Your Way to Financial Empowerment

For women, financial empowerment is not just about wealth creation; it's about achieving financial security and independence. As women continue to break barriers and take charge of their financial destinies, Mutual Funds have the potential to be a strategic avenue for wealth creation. Whether you’re a young professional or planning for retirement, one must consider these funds as part of their investment journey. Remember, financial independence is not just a goal; it’s a powerful tool for empowerment!

In this endeavour, SIP (Systematic Investment Plans) can prove to be an interesting element for investors. One can make periodic payments of a pre-determined sum in a scheme of their choosing. This will help inculcate a sense of discipline and one can also stand to benefit from the power of compounding. Furthermore, one can invest with a sum as small as INR 100 or INR 500 per month, making it suitable for all investment corpuses. Investors can also consider Step-up SIP which allows women to adapt their investments according to their financial capabilities, ensuring that they keep pace with the earning potential.

Let us look at some of the avenues that women can consider:

Consider the potential of Hybrid Funds:

At its core, hybrid funds are a blend of equity and debt instruments, ingeniously crafted to offer the best of both worlds: the growth potential of stocks and the stability of bonds. Hybrid mutual funds offer a gamut of options to investors basis their equity/debt exposure. Since these funds offer diversification as an inherent component of the scheme, investors are free from the hassle of putting money into multiple funds, proactively tracking them and then, adjusting allocation in response to mark to market changes and incremental flows.

Hybrid funds can play a pivotal role here, providing a gateway to making informed investment decisions. They can be leveraged at different stages of one’s financial journey. For the young professional, starting early with hybrid funds can help build a substantial corpus over time, leveraging the power of compounding. For the family planner, women balancing home and career, can find solace in the relative stability of hybrid funds, ensuring their family’s financial needs are met without high exposure to risk. And as retirement approaches, the focus shifts to preserving wealth and stability, which can be achieved by focusing on hybrid funds that have higher exposure to debt.

Investing in Passive Strategies:Passive Funds can be a good avenue for investors who are inherently looking for market-linked returns, minimum tracking error, diversification, and transparency in portfolio composition. Passive investing strategies have proven to be ideal for those investors who wish to leverage the benefits of the domestic markets while wanting to maintain downside protection to their portfolios. Women can consider gaining exposure to a whole range of Index Funds, ETFs, or even FoFs to create a diversified, transparent, and low-cost portfolio.

Investing in Debt Funds: Most investors tend to get scared or have multiple misconceptions about Debt Funds. However, these instruments can turn out to be some of the most viable options to park surplus money and meet income needs. For those who wish to add an additional layer of stability to their portfolio, Fixed Income strategies should not be overlooked. In the current macro environment, Fixed Income strategies have the potential to be an attractive entry point for several investors.

Investing in Equity Funds: Equity Mutual Funds too offer several compelling reasons for women investors. It is essentially an opportunity to participate in the growth potential of the market while aiming to manage risk effectively. Today, women have the option to choose across market caps depending on risk appetite, financial goals, and investment horizon. Ultimately, the aim is to adopt a disciplined approach and stay focused on the long-term objectives and not fall prey to emotional or other biases.

Disclaimer: This document represents the views of Axis Asset Management Co. Ltd. and must not be taken as the basis for an investment decision. Neither Axis Mutual Fund, Axis Mutual Fund Trustee Limited nor Axis Asset Management Company Limited, its Directors or associates shall be liable for any damages including lost revenue or lost profits that may arise from the use of the information contained herein. No representation or warranty is made as to the accuracy, completeness or fairness of the information and opinions contained herein. The material is prepared for general communication and should not be treated as research report. The data used in this material is obtained by Axis AMC from the sources which it considers reliable.

While utmost care has been exercised while preparing this document, Axis AMC does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Investors are requested to consult their financial, tax and other advisors before taking any investment decision(s). The AMC reserves the right to make modifications and alterations to this statement as may be required from time to time.

Statutory Details: Axis Mutual Fund has been established as a Trust under the Indian Trusts Act, 1882, sponsored by Axis Bank Ltd. (liability restricted to Rs. 1 Lakh). Trustee: Axis Mutual Fund Trustee Ltd. Investment Manager: Axis Asset Management Co. Ltd. (the AMC). Risk Factors: Axis Bank Limited is not liable or responsible for any loss or shortfall resulting from the operation of the scheme.

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.