Accumulated wealth has increased among the growing population of female professionals. NAZNEEN HALIM probes the prospects for specific wealth management tools for women and the feasibility of carving a niche sector.

“She was a woman of the world. She knew the world, and she was completely self confident.” Khadijah, Prophet Muhammad’s first wife, was respected as not just a strong woman but also an adept businesswoman. It is currently estimated that women in the GCC alone hold US$40 billion in personal wealth, of which US$12 billion belongs to Saudi Arabian women.

And of that US$12 billion, 75% is sitting in cash deposits and 20% in unit trusts. According to Noripah Kamso, CEO of CIMB-Principal Asset Management, this is because women in the Middle East hold the keys to their family coffers. This phenomenon of growing wealth among the fairer sex is also slowly becoming a norm within Asian societies where women have taken on leading roles in the corporate scene and have become more aware of investment options. According to a study by the Center for Economic Business Research, it is estimated that 53% of the millionaires are likely to be female by 2020.

Another study by RBS Coutts shows that the penetration of high net worth women with investible assets of more than US$1 million each in 2009 stood at 26% in Hong Kong with US$40 billion of assets under management and 23% in Singapore with US$16 billion in assets under management. Statistically speaking, there is no reason why wealth management products for women should remain an untapped sector.

Investment opportunities
Recognizing the cultural significance of women and wealth in the Middle East and the growing acquisition of wealth among women globally, several Islamic banks and fund managers have put together investment opportunities specific to women. Among them are RHB Islamic’s Az Zahra Fund which was launched in 2008 to attract high net worth women, Dubai-based Mayfair Wealth Management with its product Ameerah, and Al Rajhi Capital’s product, Al Jawharah Ladies Fund.

Research by Mayfair Wealth Management shows that despite women controlling a significant portion of the financial assets in the Middle East, they are less likely than their male counterparts to actively invest their capital. However, the market also acknowledges that women are becoming more financially astute and increasingly want to make their own financial decisions.

Amani Choudhry, CEO of Ameerah at Mayfair Wealth Management said: “Ultimately, our aim is to guide women on how they can enjoy high returns on investment and financial freedom through products and services that specifically meet their financial needs.”

Noripah of CIMB-Principal Asset Management agrees that personal wealth among women has increased, seeing the powerful positions held by women in the corporate sphere. However, she is skeptical about the creation of funds specifically targeting women. “We believe there is increased personal wealth among women in Asia and globally, but this does not beckon the need for a fund targeted specifically to this class.

“The risk is quite high as there is a limited investor base, and when the assets under management are low, the fund performance will drop. This may pose an investor risk. Generally the bigger the fund, the easier it is to manage and the better is the performance.”

A spokesperson at Al Rajhi Capital, whose Al Jawharah Ladies Fund is said to be enjoying the custom of Saudi women who are seeking diversified investments, however begs to differ: “As women continue to grow their business ventures so will their demands. Given the relatively high levels of deposits in relation to investments, some Saudi women are increasingly seeking financial independence by diversifying the nature of their holdings.”

Basic instinct
“Women generally look into traditional asset classes. They are more risk averse and look for more stable investments and capital protection regardless of the returns,” Noripah elucidated. “It is a known fact that women like investment products with stable income streams and if possible, ethical. Islamic investments are a subset of this, which is appealing.”

The Al Rajhi Capital spokesperson concurred, stating: “Saudi female clients are also more risk averse and therefore willing to commit to medium and long term investments instead of the speculative trading favored by the opposite sex.”

Asked for the reason behind creating an investment fund specifically for women, the spokesperson said: “The specific religious and social aspects of Saudi Arabia dictate the need for specific women business units and branches where they can feel at ease when dealing with other professional women. Through these exclusive branches, we can make sure we target the other half of the Saudi investors and improve the viability of our business.”

However, despite the statistics and growing interest in this investment class, many still believe that the long-term prospects for Islamic funds targeting women specifically are much more sound than the medium-term outlook, and again, education is of utmost importance.

“Awareness of these products and its presentation are very important — brand it as a savings plan instead of an outright investment scheme. Also, banks and fund managers could promote their products via the government ministries related to women’s affairs and women’s magazines,” Noripah concluded.