The UK has the joint 8th lowest proportion of female investors

Investing has long been male-dominated. That’s still the case today, but is the tide beginning to turn? Sean LaPointe looks at the latest numbers.

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The world of investing has for a long time been dominated by men. And this still appears to be the case in 2021. New research shows that across different countries in the world, female investors continue to be significantly underrepresented.

So, where does the UK currently rank in terms of the proportion of male and female investors? And what does the future hold?


Male vs female investors in the UK: what does the research show?

According to a new report by online broker discovery and comparison platform BrokerChooser, male investors outnumber female investors in every single country on the planet. The platform reports a global split of 76% male investors to 24% female investors.

The gap is even wider in some countries. In Bangladesh, for example, the proportion of female investors is just 12%.

Meanwhile, in the UK, the current split between male and female investors is 79% to 21% in favour of men.

This places the UK in joint 8th place on the list of countries with the lowest proportion of female investors, alongside the likes of Canada, India, Portugal and Turkey.

However, the gap isn’t as wide everywhere in the world. For example, in the Philippines, the proportion of male to female investors is a commendable 56% to 44%.

The complete list of countries and their rankings can be found on the BrokerChooser website.

Why are there fewer female investors?

Previous research has looked into why women are less likely to invest than men and identified a few possible explanations.

Some studies have linked the phenomenon to the gender pay gap. They argue that pay differences between the sexes leave women with less disposable income – and less money to invest.

Women have also been shown to be more risk-averse than men.

A lack of investing confidence and knowledge also appears to be a factor. One study by YouGov showed that far more men than women express confidence and sufficient knowledge about investments.


Do men make better investors than women?

No. It’s actually quite the opposite.

Research shows that women tend to outperform men when it comes to investment returns. A 2017 study by Fidelity found that women investors outperformed men by 0.4%. This might not seem like much, but over time, these differences add up.

Interestingly, one of the reasons that women outperform men is the same reason that many women avoid investing: risk. Where men are often more speculative and willing to take on risky investments, women are generally more conservative. They prefer to invest in tried and tested opportunities that have a good track record.

Women are more long-term focused, which has historically proven to be a much better approach to building wealth. They also spend more time researching their investments than men, which works in their favour in terms of returns.

What does the future hold?

Though there is still a sizeable gap between male and female investors, there is much to be optimistic about in the future. The number of female investors is steadily increasing.

In 2020, the number of new female investors rose by 354% according to Saxo Markets. In comparison, the number of male investors grew by 288%.

At leading investment platform Nutmeg, women accounted for 40% of new investors in 2020, compared to 35% in 2019 and just 27% in 2016.

According to Nutmeg, the Covid-19 pandemic has led to a significant shift in the attitudes and behaviours of women towards their money and, perhaps more importantly, their investments.

The study by Nutmeg found that 41% of women said that the pandemic prompted them to start thinking differently about their financial planning. And 32% of female investors said that the crisis made them see investing as more important.

It’s great that attitudes towards financial planning and investing are changing among women. That being said, more still needs to be done to address some of the other barriers that currently inhibit investing among women, such as lack of investing confidence and knowledge.

Final word

Do you want to start investing but have absolutely no idea where to begin? Check out the Fool’s guide to getting started in investing for everything you need to know. In the guide, you can find out about what you need to do before you start investing, the investment options available and the various vehicles you can use to invest.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

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