Social media has been abuzz with tributes and acknowledgements to women for International Women’s Day. It shows us just how far we’ve come, and how far we have to go.
One area where women lag is finance. On a global average we earn 23% less than men for the same work. The gender pay gap is a story for another time (check out this Twitter bot that called out the gender pay gap in response to company IWD posts), but failing to invest what money we do make is the number one financial regret for women. Despite knowing investing and diversification of revenue streams are key steps towards financial freedom, women are wildly under confident when it comes to taking the plunge.
The tide is turning though, with an influx of female investors entering the market over the past 18 months. According to an ASX report women made up 45% of all new investors in 2020. Women also outperformed their male counterparts by 1.8% when it came to portfolio performance likely due to a more conservative approach to investing. During market fluctuations at the height of the pandemic only 41% of women made changes to their portfolios, compared with 63% of men. That figure aligns with the general trend seen amongst female investors who don’t shift their assets as frequently as men. The average annual turnover rate of women’s portfolios sits at 53% compared to men at 77%.
Safe to say there is ample evidence that we fare just fine when it comes to market resilience.
Rachel White, Head of Product Strategy at Vanguard Australia was featured on yesterday’s episode of The Ideas Exchange, an ASX podcast to give more colour to women’s relationship with investing.
White spoke to the shift in the investor profile in recent years and the flow on effect this has, causing investing to become more democratised. “The stereotypes of who an investor is or who an investor can be, is really changing,” said White. “And the access to easy to understand financial information is becoming more available, it’s becoming more tailored to these new demographics.”
She’s right. There has been a marked rise in ‘finfluencers’, podcasts geared to women and investing platforms which have made investing and learning easier than ever.