Women Investors
Women who invest their money get slightly higher long-term returns than men, new analysis suggests
Women who invest their money get slightly higher long-term returns than men, according to new analysis. Only about a quarter of UK women have investments, compared with about 40% of men, a separate report shows.
Women and investing
The data behind these trends reveal some surprising differences in how men and women approach investing. Teleri Evans, a civil servant from Cardiff, began saving into a Help To Buy ISA at 25 and later took out a stocks and shares Lifetime ISA. By 33, she had £40,000 saved, with £8,000 of it returns on her investments.
Gillian Fleming, co-founder and managing director of UK-based Mint Ventures, attributes the lower number of women investing to culture. Men historically have been more likely to make family investment decisions, and women have also historically not owned the balance of wealth, but that is changing now.
Investment returns
When women do invest in stocks and shares, analysis by Fidelity International found that over three years its female personal investing customers recorded cumulative returns of 50%, compared with 47% for men. One possible clue to women's slightly higher long-term returns lies in how often they buy and sell their investments, with Barclays data showing that women trade around half as frequently as men.
| Category | Women | Men |
|---|---|---|
| Investment rate | 26% | 41% |
| Investment rate under 45 | 23% | 40% |
| Cumulative returns over 3 years | 50% | 47% |
According to Joanna Floyd, business psychologist at London-based The Work Psychologists, women are more patient and risk averse, which could be the reason for their slightly higher long-term returns. Fleming also says women appear to invest more broadly, choosing companies from a range of industries, including retail, food and drink, health and beauty, fem tech, and creative industries.
Anna Macdonald, investment strategy director at financial services company Hargreaves Lansdown, agrees that women choose the companies they invest in carefully, placing greater weight on where their money is going and what impact it might have. Jemma Slingo, pensions and investment specialist at investment firm Fidelity International, says female investors appear more likely to connect investing with real-life goals, from building emergency savings to looking after children.
The investment sector needs to do a better job of making investing feel accessible, relevant, and connected to people's own goals and values, according to Macdonald. Addressing this would be good for women's long-term financial resilience and for the UK economy, as women in the UK generally have less money to invest than men due to the continuing gender pay gap.
The BBC reports that women are often better investors than men, citing the analysis by Fidelity International and the data from Barclays. The source of this information is the BBC, which has looked at the data behind these trends and spoken to experts in the field, including Fleming, Floyd, Macdonald, and Slingo.
