It’s official – women really are more savvy investors than men, according to investment firm Fidelity.
The company which has US$6 trillion under management and 8 million investors last year, found that women investors outperformed men by 0.4 per cent over the year. The fairer sex have also outperformed men over the past decade.
Analysis by investment tracking app Openfolio also found the same trend. Among its 60,000 investors, women had performed better than men for the past three years. In 2016, women investors managed to get investment returns an average 0.2 per cent better than men.
According to a report in the Sydney Morning Herald, hedge funds run by women have outperformed the broader benchmark. The HFRI Women Index, owned or managed by women, has returned 4.4 per cent over the past five years compared to 4.2 per cent return for the HFRI fund weighted composite index, which is a broader gauge of hedge funds.
While it is widely accepted that women are more risk averse than men when investing, this has translated positively in returns.
“Women are doing better than men with a lot less risk. Women have long-term goals and they stick with the plan. They focus on saving and investing for retirement or a kid’s college fund, not on outsmarting the market,’’ said Kathleen Murphy, president of personal investing at Fidelity.
Men, on the other hand, are willing to take more risk.
But the myth that men make better investors than the fairer sex, still remains.
When Fidelity asked who was better at investing in a survey, 42 per cent said men compared to 9 per cent who picked women.
This is not surprising because the investing industry was built “by men, for men,’’ Sallie Krawcheck, the former CEO of Citigroup and Bank of America told SMH.
She even admitted that for a while she bought into this myth that women had no clue about finance and that’s why in many households, it is often the men who manages the money.
Part of the problem, she said was that 86 per cent of investment advisers in the US were men over the age of 50.
Despite being better investors than men, women in Australia expect to retire with $200,000 less in their superannuation than men who expect to retire with an average of $475,646, according to the latest RaboDirect Financial Health Barometer survey.
This is because most women are out of the workforce for a couple of years when they have children.
Just two years out of the workforce would account for a $30,000 – $50,000 difference in a woman’s superannuation balance.