Analysis Shows Female Investors Outperform Men

Women do better than men when it comes to their investment portfolios, new research has revealed.

New analysis of Hargreaves Lansdown’s clients found that between August 2014 and August 2017, women outperformed men by an average of 0.81 per cent. If this performance was replicated over 30 years, women would end up with a portfolio that was 25 per cent larger than their male counterparts.

Graph which shows female investor beating male over time

However, women are still much less likely to own a stocks and shares ISA than men, the investment platform discovered.

“Women are far better investors than they think they are,” said Sarah Coles, personal finance analyst at Hargreaves Lansdown.

“They are often held back by a concern that they don’t have sufficiently in-depth knowledge, or that they don’t want to take on too much risk. As a result, industry figures show that women open 20 per cent fewer stocks and shares ISAs than men.

“This analysis demonstrates that these concerns are misplaced. Women who invest overwhelmingly have the knowledge they need in order to make sound investment decisions. And rather than working against them, their determination not to take excessive risks with their investments is one of the things that makes them such good investors.”

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Hargreaves Lansdown identified a few key reasons why women tend to outperform men.

According to the research, women are more likely to have naturally diverse portfolios, and they are less likely to invest in riskier assets. This meant that women were 50 per cent less likely than men to suffer a loss of 30 per cent or more over the three-year period.

Women are also more likely to ‘buy and hold’ their investments, with the research finding that women traded shares 49 per cent less frequently than men between August 2014 and August 2017. This meant that they incurred fewer trading costs and were able to benefit from long-term stock market growth.

Hargreaves Lansdown also pointed out that 65 per cent of women who invest do so via an ISA, compared with just 58 per cent of men.

“By investing in an ISA, they are sheltering their investments from income tax and capital gains tax, and avoiding them from eating into their returns,” said Coles.

“Of course, this doesn’t detract from the fact that men have also generated excellent returns during the period,” she added. “In fact, roughly a third of both men and women saw returns of 30 per cent or more over that three-year period, which goes to show the success investors have had, regardless of gender.”

Kathryn Gaw

Kathryn Gaw is a financial journalist based in Belfast, Northern Ireland. She has been writing about personal finance and investment trends for more than a decade, and her work has been featured in the Financial Times, City A.M., the Press Association, and The Irish Independent, among many other publications.