Women mutual fund distributors represents 21.5% of total registered MFDs in India: AMFI – Crisil Report

The number of women distributors has grown to 37,376 registrations mark as of December 2024. This represents 21.5% of total registered mutual fund distributors (MFDs) in India, according to a joint study conducted by Crisil and the Association of Mutual Funds in India (AMFI).

Effective investment advice and handholding can play a significant role in shaping investment behavior, and it is likely that the growing pool of knowledgeable and experienced distributors has contributed to the increasing trend of long-term investing among women, the study highlighted.

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Over the past five years, women investors are showing a preference for long-term holdings. The AUM of women investors, with a holding period of over five years, has increased from 8.8% of the total women investors’ AUM in March 2019 to 21.3% in March 2024, which shows that women are becoming increasingly patient and committed to long-term wealth creation.

The share of women investors’ AUM in accounts that have been in existence for less than a year declined from 40.5% in March 2019 to 25.4% in March 2024. For men, this share reduced from 42.2% to 27.0%.

Women accounted for one in every four mutual fund investors, underscoring the growing trend of women’s empowerment in financial decision-making as of December 2024, according to a release by AMFI and Crisil.

Women investors’ adoption of mutual funds in India has surged over the past five years. Assets under management (AUM) of women investors more than doubled from Rs 4.59 lakh crore in March 2019 to Rs 11.25 lakh crore in March 2024. Women investors constitute a substantial proportion of individual investors’ AUM — about Rs 33 in every Rs 100 invested in MFs.

The study highlighted that the average investor folio size across different individual investor types has exhibited a notable trend over the last five years, with women investors demonstrating a significant increase in their investment ticket size.

Women’s average folio size grew a substantial 23% from a base value of 100 in March 2019 to 123 in March 2024. In contrast, men’s average folio size expanded a modest 5% from 100 in March 2019 to 105 in March 2024.

The national participation rate of women in mutual funds is 25.1% in terms of unique investors and 33.2% in terms of women investors’ AUM as a percentage of individual investors’ AUM. The participation rate based on AUM is higher than the unique investor-based participation rate, indicating that women investors tend to invest larger amounts than men.

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Women investors in 30 cities have a larger share of the total women investors’ AUM (74.8% in March 2024), but the share of women in 30 cities has increased significantly from 20.1% in March 2019 to 25.2% in March 2024, indicating the growing penetration of MFs among women in smaller cities.

Women below the age of 35 in 30 cities account for 15.1% of the AUM, which is significantly higher than the T30, constituting only 9.4% of the AUM. This variation indicates that younger women in smaller cities are more proactive about investing in MFs, bucking the trend of lower financial inclusion in these areas.

The share of equity AUM in women’s overall AUM increased substantially from 43.3% in March 2019 to 63.7% in March 2024. This uptrend suggests a growing affinity among women investors for equity as an investment avenue.

In terms of investment preferences within equity, women’s allocation to large-cap funds decreased approximately 6%, from 19.2% of their total equity AUM in March 2019 to 13.3% in March 2024. Conversely, women’s equity AUM parked in small-cap funds increased from 6.2% in March 2019 to 10.2% in March 2024, suggesting that women are seeking to capitalise on the growth potential of smaller companies

Women’s allocation to passive investment strategies surged from 2.5% in March 2019 to 4.1% in March 2024. Women investors’ AUM constituted 5.2% of the individuals’ total passive gold AUM in March 2019 which has increased 4 times to 24.9% in March 2024 indicating a strengthening commitment to passive investing and increasing preference for the electronic modes of investing in gold.

Women participation in debt funds declined consistently from 22.6% of women’s total AUM in March 2019 to 10.7% in March 2024. This trend is visible across all age groups of women.

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Women’s SIP AUM accounted for over 30.5% of the total SIP AUM in March 2024. It grew 319.3% between March 2019 and March 2024, suggesting that women are increasingly adopting SIPs as a disciplined investment approach.

An analysis of women’s AUM reveals that investments held in regular plans account for about 79.67% of the total women AUM as of March 2024, which declined from 85.80% in March 2019, indicating a gradual shift towards direct plans.

The adoption of direct plans increased from 14.20% in March 2019 to 20.33% in March 2024, indicating an increasing trend of self-directed investing among women. A breakdown of the AUM by the age bracket reveals a shift in the preference for direct plans in all age groups. However, younger investors have a faster pace of adoption for direct plans. For example, the “25-44” category saw a significant jump from 16.0% to 27.3% of the AUM, while the “above 58” category witnessed a slower adoption from 13.9% to 17.6%.

The AUM of women investors, with a holding period of over five years, has increased from 8.8% of the total women investors’ AUM in March 2019 to 21.3% in March 2024, which shows that women are becoming increasingly patient and committed to long-term wealth creation.

The share of women investors’ AUM in accounts that have been in existence for less than a year declined from 40.5% in March 2019 to 25.4% in March 2024. For men, this share reduced from 42.2% to 27.0%.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)