Number of women investors rises: but are they outperforming men?

According to new research, the number of women investors is rising. So, how are their portfolios performing compared to those held by men?

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Two women in the home office

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

New research reveals that the number of women investors is on the rise. The same research also reveals that women investors are outperforming their male counterparts.

So, what else did the research reveal? And are we likely to see even more women investors in future? Let’s take a look.


What did the research reveal about women investors?

According to Westian Global, women investors are likely to hold 35% of the world’s investable wealth by 2023. The wealth management company came to this conclusion after highlighting data from 2020 that revealed women investors accounted for a third of global investable wealth in that year. This was up from 30% in 2016.

Overall, it’s expected that by next year, wealth held by women will equate to $7.4 trillion (£5.6 trillion). This compares to $13.8 trillion (£10.4 trillion) of wealth expected to be held by men.

The report also suggested that if female investor numbers catch up with those of men, then $3.2 trillion of extra capital will find its way to global stock markets. This is the reason why the report suggests wealth managers and other financial service providers may wish to start catering their products specifically towards woman investors.

What else did the research reveal?

Aside from highlighting the increasing number of women investors, the report also suggested that women are more likely than men to value a discussion with a professional adviser. 

The report suggests that eagerness among women investors to seek professional advice is probably down to the fact that women generally invest in order to achieve life goals.

In contrast, men are more likely to invest in order to ‘beat the market’ and score higher than average returns. As a result, it can be assumed that male investors following this approach are more likely to want to ‘go solo’, rather than discuss their ambitions with a professional adviser.


Men vs women: which gender achieves higher returns?

In addition to highlighting behavioural differences between the genders, the report revealed that portfolios held by woman typically outperformed those held by men. On average, the report says women investors beat men by roughly 1.8% per year.

This finding aligns with similar research from the 2021 Women and Investing Study. The study also revealed that women investors outperform their male counterparts on average. However, the data suggested that women beat men by 0.4% per year rather than 1.8%.

One explanation as to why women investors usually beat men is because women investors typically make fewer trades. This is significant as every trade made in the stock market – either to buy or sell shares – attracts a fee. As a result, a strategy of limiting trades can cut the cost of investing and consequently boost returns.

Another reason why women investors outperform men is because women are seemingly less affected by ‘disposition bias.’ This refers to investors selling stocks after big falls in order to reduce the chances of suffering further falls. It’s widely agreed that such an investing strategy is flawed. That’s because it’s linked to ‘timing the market’ – a strategy many experienced investors would advise against. 

Put simply, trying to ‘time the market’ means you essentially believe that you know how stocks will perform in future. You assume that you have more knowledge than other investors. In reality, the opposite is true, as the market is typically one step ahead of retail investors.

While it’s possible to successfully ‘time the market’, it’s typically down to luck as much as anything else.  

Are you looking to invest? If so, it’s worth choosing a share dealing account with low fees. This is especially important if you plan to trade regularly, as high fees can eat into your returns.

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 assessed. Consider taking independent financial advice.

More on Personal Finance

Note paper with question mark on orange background
Personal Finance

Should you invest your ISA in a model portfolio?

Which model ISA portfolios offer both high performance and low fees? Hargreaves Lansdown, Interactive Investor and AJ Bell go under…

Read more »

Economic Uncertainty Ahead Sign With Stormy Background
Personal Finance

Is it time to exit emerging markets investments?

Investors may well be sitting on losses from emerging markets funds. Is it worth keeping the faith for a sustained…

Read more »

Personal Finance

Share trading? Three shares with turnaround potential

Share trading has been difficult in 2022, but which companies have turnaround potential? Jo Groves takes a closer look at…

Read more »

Man using credit card and smartphone for purchasing goods online.
Personal Finance

Revealed! Why Gen Z may be the savviest generation when it comes to credit cards

New research reveals that Gen Z may be the most astute when it comes to credit cards. But why? And…

Read more »

Environmental technology concept.
Personal Finance

The 10 best-performing sectors for ISA investors

The best-performing sectors over the past year invested in real assets such as infrastructure, but is this trend set to…

Read more »

Road sign warning of a risk ahead
Personal Finance

Recession risk ‘on the rise’: is it time for investors to worry?

A major global bank has suggested the risk of a recession in the UK is 'on the rise'. So, should…

Read more »

pensive bearded business man sitting on chair looking out of the window
Personal Finance

1 in 4 cutting back on investments amid cost of living crisis

New research shows one in four investors have cut back on their investing contributions to cope with the rising cost…

Read more »

Image of person checking their shares portfolio on mobile phone and computer
Personal Finance

The 10 most popular stocks among UK investors so far this year

As the new tax year kicks off, here's a look at some of the most popular stocks among UK investors…

Read more »