Women are natural born investors

Sydney, Australia: Analysis of female and male investment behaviour by InvestSMART, a leading digital wealth platform, has found that female investment portfolios could potentially miss out on an average of $50,877 in returns because their portfolios are too conservative. 

InvestSMART analysed the investing behaviour of over 4,000 of its members who use its Portfolio Manager. It found that women: 

• Are more likely to identify as a conservative investor (47%) compared to men (36%). 

• Have more diversified portfolios than men. 

• Trade less frequently. Men's buy / sell ratio is 1.9 times more than females. 

• Allocate 23% of their portfolio to managed funds (including ETFs) compared to men who allocated 11%.  

According to the ASX the median female portfolio size is $95,990 (ref 1). This means investors with a conservative portfolio focussed on cash and bonds can expect an average return of 5% a year. Conversely, those with a growth-oriented portfolio with a higher allocation of shares may see return closer to 8% a year. 

Median portfolio value of $95,990 returns over 10 years:

Source: Morningstar, InvestSMART. Ref 2  

Effie Zahos, InvestSMART's chief money commentator said: 

"When women invest they tend to get it right on all the major fronts. Their portfolios are well diversified, they buy more than they sell and they're not afraid to get help from the experts. 

"However, this data indicates that women are more likely to opt for more conservative investments. In the short-term that doesn't mean much but over 10 or 20 years the difference of 3% is enormous. An extra $50,000 could help pay for maternity or carers leave, boost a home deposit or go towards retirement. 

"When you invest it's important to consider your investment timeframe, your goals and how you feel about risk. Understanding how long you plan to invest for can go a long way to determining the investments best suited to your goals. 

"International Women's Day is a celebration of progress, and despite the headlines that make it seem impossible to get ahead, women have the inherent traits to build financially rewarding investment portfolios. Whether starting with $500 or $10,000, getting started is accessible and empowering."

InvestSMART also analysed client data from its diversified ETF portfolios, it found there was almost no difference between women and men's portfolio choice. 

The investment advisor believes this indicates that when presented with information about how to consider different investments and prompted to think about long- term financial goals, investors are more likely to choose an investment portfolio more appropriate to their age and circumstances.