International Women’s Day: Diversification is a must while investing, says Meeta Shetty of Tata Asset Management

Investing through SIPs offers a strategic and stress-free approach to wealth creation as they provide the opportunity to enter the market regularly, regardless of its fluctuations, says Meeta Shetty, Fund Manager, Tata Asset Management.

In an interview with MintGenie, Shetty said that exposure to different asset classes not only minimises volatility but can also optimises returns over a longer period.

Edited Excerpts:

What according to you should be done to attract more women to invest in equities?

Encouraging women to invest in equities requires a multifaceted approach. Firstly, financial literacy initiatives tailored to women should be widespread, providing a comprehensive understanding of investment options and risk management. Emphasizing the long-term benefits of equity investments and debunking common misconceptions can foster confidence. Additionally, creating a supportive community where women share experiences and insights can be instrumental in building a sense of fellowship and empowerment. Flexibility in investment approaches, considering different financial goals and risk tolerances, is vital. Lastly, highlighting successful female investors as role models can inspire others to take the plunge into equity markets, fostering a more inclusive and diverse investor community.

What is your take on the role of mutual funds in building financial knowledge and securing a stable financial future for women?

Mutual funds play a pivotal role in empowering women to build financial knowledge and secure a stable financial future. Taking a cue from my own investment journey, the recommendation is to start small with systematic investment plans (SIPs), as it allows for gradual and consistent wealth accumulation.

Mutual funds offer a diversified portfolio managed by financial experts, aiding women in navigating the complex world of investments. By understanding various financial products, setting realistic goals, and maintaining financial discipline, women can leverage mutual funds to align their investments with long-term objectives. Moreover, mutual funds provide an excellent avenue for women to participate in equity markets without the need for extensive market knowledge. This inclusive approach fosters financial independence, making mutual funds a valuable tool in shaping a secure and prosperous financial future for women.

How does one benefit from investing through SIPs?

Investing through SIPs offers a strategic and stress-free approach to wealth creation. The SIPs provide the opportunity to enter the market regularly, regardless of its fluctuations. This systematic investment approach not only eliminates the need for precise market timing but also allows investors to benefit from rupee-cost averaging. As markets fluctuate, the fixed investment amount buys more units when prices are low and fewer units when prices are high, averaging out the cost per unit over time. This shields investors from the impact of short-term market volatility and promotes a disciplined, long-term investment approach, making SIPs an effective tool for achieving financial objectives with consistency and prudence.

Why and how should women opt for a diversified investment portfolio?

Diversification is an apt risk mitigation strategy and is a must while investing. Exposure to different asset classes will not only minimise the volatility but can also optimise returns over a longer period. Having a financial advisor and charting out financial goals both in terms of event-based needs as well as retirement planning is an ideal start. Women can also do the financial planning themselves, the basic boxes to be ticked before one begins investing are (1) to get an understanding of the various financial products across asset classes, have a defined and realistic goal, and based on that plan for asset allocations, and ensure financial discipline.

There is an increasing presence of women in the financial industry. Do you think it has brought the necessary impact in shaping investment strategies?

Women are increasingly choosing the financial industry as a career option vs what we were seeing a decade ago. We are also seeing some women going up the ladder and taking up the CXO level roles but even today the penetration is quite low at both overall level as well as senior levels. In India, women as Fund managers are still below 15%, this number must be higher in mid-level roles. More women in the industry does help in many ways.

Women have always been better at managing finances, even as homemakers, for decades we have been managing the household finances with an extremely conservative & logical approach. Women usually take calculated risks; they are more risk-aware and not risk-averse. This helps in getting a different perspective to the table.