The Gender Investing Gap is Real and the Statistics Are Here to Prove It

When it comes to investing, the differences between men and women are wide. We’ve rounded up the research and statistics to paint the picture for you

Anna-Sophie Hartvigsen
February 20, 2023
Women are statistically proven to invest less than men. Why is this a problem? Well the compounding impact means women could face further disadvantages in the long-term (Image: Stephanie Green/Unsplash)
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All around the world, women are lagging behind men financially. One of the reasons for that is gender differences towards investing. And yes you guessed it – women are shown to invest significantly less than their male counterparts.

Why is this a problem? Well the compounding impact means women could face further disadvantages in the long-term. 

In this jaw-dropping statistic round up, you’ll learn that when it comes to investing, men and women differ – a lot. 

Isn’t it time to turn these investment statistics on their head? It’s time to close the gender investment gap.

How many women are investing?

The number of women pouring money into investments is rising. 

A 2021 study by Fidelity found that 67% of women are now investing outside of their retirement accounts, compared to 44% in 2018. 

The same study shows that the onset of the Covid-19 pandemic contributed to this surge, with 51% of women saying they started investing since the start of the pandemic.

42% say they now have more to invest since the start of the pandemic. 

That being said, only 33% of women actually see themselves as investors, according to Fidelity. In fact, About 34% of women in a US based survey by FinanceBuzz, haven’t taken the plunge on investing compared with 24% of men. 

Source: Fidelity, FinanceBuzz

48% of women currently have money sitting in investments within the stock market, compared to 66% of men (Image: Female Invest)

Women invest less than men

In just the UK alone, 29% reported trading stocks and shares online, compared to 47% of men.

This picture is similar across the world. According to a survey by NerdWallet, 48% of women currently have money sitting in investments within the stock market, compared to 66% of men.

This can be explained by the fact that women do not view investing as a financial priority. A YouGov survey tells us that 62% of men deem investing a high priority, versus 55% of women.

Source: Capital, NerdWallet, YouGov

Women spend less time investing than men

A study by University of California-Berkeley revealed that men traded 45% more than women did, back in the 1990s. The downside being that excessive  trading was said to reduce men's net returns by 2.65% a year, as opposed to 1.72% for women.

The picture hasn’t exactly shifted over the decades. By 2020, Vanguard revealed that 50% of women were less likely than men to trade actively.

But what’s more, a FinanceBuzz survey revealed that 60% of men check their investment portfolios once a week, which only holds true for 41% of women.

Robo-advisor Betterment has also found that women change their asset allocation 20% less frequently than men in their portfolios.

Source: University of Berkeley, FinanceBuzz, Vanguard, Betterment

Women lack confidence when it comes to investing

BNY Mellon revealed that only one in 10 women globally felt they fully understood investing.

The same study showed that 28% of women felt confident about investing their money. 

It’s therefore no surprise that 45% of women viewed the stock market as too risky for them.

Fidelity’s 2021 survey painted a similar picture, with only 33% reporting that they felt confident handling their own investments.

NerdWallet also found that more women (29%) report feeling more anxious about their holdings than men (22%).

This helps to explain why 23% of women claim they don’t know how investing works, compared to only 16%of men who said the same.

Source: BNY Mellon, Fidelity, NerdWallet,  FinanceBuzz

46% of millennial women feel equipped to handle investments (Image: Jonathan Borba)

Women’s confidence increases with age

The good news is that while women lack confidence in investing, this self-perception changes with age. 46% of millennial women feel equipped to handle investments, which is 52% of Gen X women, 54% female baby boomers, and 62% of women of the silent generation.

62% of women are confident they’re able to save for retirement. But perhaps it’s all too good to be true, because according to Motley Fool, only 43% of women feel they have planned for retirement well, compared to 54% of men.

Source: Motley Fool

Women are investing earlier than men

Whilst countless research points to the fact that women invest and trade less frequently than men, FT Advisor found that UK women start investing at an average age of 32, three years younger than their male counterparts who start at 35.

This finding is made more intriguing, when in 2022, Fidelity found that 36% of older women (age 36 and above) said that their biggest financial mistake was “waiting too long to start saving for retirement.”

Source: FT Advisor, Fidelity

Demographic differences in female investors

According to the 2021 Fidelity study, three fourths (71%)  were millennials (ages 25-40), 67% of Gen X (ages 41-60) and 62% of boomers (ages 57-75) .

It’s younger women who are closing the investment gender gap.

However, there exist significant differences amongst female racial groups, with black women lagging the most behind.

59% don’t have any cash in investments, compared to 48% of Hispanic women and 34% of white women, reveals a survey conducted by Momentive.

Source: Fidelity, Momentive

Women favour advice from others

When seeking financial advice, FinanceBuzz finds that women are more likely to seek investment knowledge from other people whilst more men seek knowledge through the internet. 

The same survey found that 18% of women developed their knowledge around investing from their partners. Meanwhile, only 7% of men said the same.

Source: FinanceBuzz

Women are better at diversifying than their male counterparts, which serves as a strategy to protect their money regardless of market conditions (Image: Filip Mroz/Unsplash)

Women prioritise long-term security over short-term gains

A study of European investors conducted by N26, revealed that only 23% of women prioritised short-term wealth gains, compared to 43% who put long-term wealth as their investment priority.

The same study found that women investors say they want to increase their investments over the next year.

Source: N26

Women favour less risk investments than men

Capital revealed that 43% of female traders set up stop-loss orders on over half of their trades, compared to 35% of men. A stop-loss is often used as a risk management tool to limit losses.

Women are also better at diversifying than their male counterparts, which serves as a strategy to protect their money regardless of market conditions, according to Fidelity. 

This finding holds true for the FCA’s Financial Lives survey, which found that women generally tend to favour less risky investments overall. 

Source: Capital,  Fidelity, FCA

Women prioritise value over money

Women prioritise value for money when handpicking investments

In N26’s survey of European women, commission fees or attractive interest rates play a leading role in determining womens’ investment choices. Men, on the other hand, overwhelmingly prioritise long-term yields.

This rings true for FinanceBuzz who found that low management fees and/or expense ratios were one of the top priorities for women when handpicking an investment platform to trade with.

Source: N26, FinanceBuzz 

Women believe you can invest with less

According to FinanceBuzz found that women are actually more likely to believe you can start investing with less than $1,000 – such as $50 or less. 

Source: FinanceBuzz

Women prioritise investments with impact

More women (71%) make investing decisions with wider sustainability considerations in mind compared to 58% of men, according to a UBS survey.

61% of women handpick their investments based on their social or environmental impact, according to research conducted by Simple (Image: Female Invest)

Flipping it the other way round, a 2020 survey by Money Crashers found that only 19% of women said they would invest in a company that was not considered socially responsible, compared to 51% of men.

When looking specifically at women between the ages 30 and 40, 61% of women handpick their investments based on their social or environmental impact, according to research conducted by Simple.

So, the shift in financial power suggests the future of socially responsible investing is in female hands.

Source: UBS, Money Crashers, RBC Wealth Management, Simple

Women are better investors than men

Whilst women are not as frequent investors than their male peers, research shows that when they do, they outperform them.

Warwick Business School revealed that female investors outperformed the FTSE 100, but also their male counterparts over three years. The men’s investments outperformed the FTSE 100 by 0.14%. Whereas the women’s investments outperformed the FTSE 100 by 1.94%, that’s 1.80% higher than the men. If this performance was replicated over 30 years, women would end up with a 25% bigger portfolio. 

This picture held true some years before. Despite men trading 45% more than women, the University of Berkeley revealed that men had a reduction in net returns of 2.65% per annum.

Source: University of Berkeley, Warwick Business School

Why women are better investors than men

So what’s the secret? Hargreaves Lansdown found three reasons why women are investment naturals…

  1. Women are more likely to have naturally diverse portfolios…

A higher percentage of women, than men, have most or all of their portfolios invested in funds. Because they’re  invested in funds, the fund managers invest in lots of different companies, diversifying the investment and spreading their risk. 

  1. Women tend to hold less risky investments…

The study showed that women were less likely to invest in riskier assets such as single company shares of small companies. Because of this, women were 50% less likely to experience a loss of 30% or more in this period. 

  1. Women are more likely to ‘buy and hold’…

As we mentioned earlier, women traded less than men and were more likely to invest for the long term. It also means that they do not incur trading costs. 

Source: Hargreaves Lansdown

More women are investing than ever before

According to the Fidelity’s Money Moves Study, 50% of young women had either started investing in the past six months or plan to in the next six months.

The same study found that 37% of young women believe it’s important to just start investing with any amount, with 57% of older women agreeing.

48% of women took the plunge into the stock market in the past two years, according to a 2022 global survey of 9,500 female investors conducted by eToro.

A 2020 McKinsey report showed that women became more financially savvy back in 2020, when 30% more married women reported taking the reins on investment decisions than between 2014 and 2019.

On top of all of that, 20% poured their investments into new asset classes during Covid-19, revealing that they’re more prone to diversification and expanding their holdings, finds Motley Fool.

Source: Fidelity, eToro, McKinsey, Motley Fool

48% of women took the plunge into the stock market in the past two years (Image: Female Invest)

What would happen if more women invested?

As mentioned earlier, a UK study by Hargreaves and Lansdown revealed that women’s investment portfolio came out on top by 0.8%. Whilst this may not sound like a lot, imagine if this was replicated over 30 years. Women would have a portfolio 25% higher than mens!

A 2021 study by BNY Mellon showed that if women invested at the same rate as men, there would be an extra $3.22 trillion of assets under management from private individuals.

Source: BNY Mellon, Hargreaves Lansdown

Why does the gender investing gap matter?

Diving head first into all the data surrounding women and investing, the picture is crystal clear – the gender investing gap exists. We all know that women already lag behind men professionally with regards to salaries, but women not investing as much as men isn’t helping.

In a climate where it will currently take 267 years to close the financial gender gap, women have the power to change the tides of financial power. In fact,  investing is one of the best ways for women to grow their money pot over time and establish the financial freedom they deserve. 

The data suggests we need to smash the stereotypes that women are not good investors.  simply not true, as women outperform men when they do dabble in the stock market. With increasing rates around inflation and the cost of living crisis hitting the headlines, money sitting in a bank account is counterproductive, but more importantly, costly.