- Are more women investing in the financial markets?
- How does the investing participation of women change by age and income?
- What is the gender gap in investments?
- Are women more conservative investors than men?
- Where do women invest their money?
- How does gender affect investment decisions?
- What’s next for women in investing?
A 2021 survey by Fidelity Investments found that 67% of women were investing outside of their retirement accounts, up from 44% in 2018. Also, the number of women interested in investing increased by 50% since the start of the COVID-19 pandemic. So, although the gender gap in investing still exists, some progress has been and is being made toward equality in this area. Other statistics:
- McKinsey & Co. found that the number of married women making financial and investing decisions increased by 30% between 2015 and 2020.
- In 2021, 68% of women had started to talk about finances in their homes, according to a survey by UBS, a global financial services firm.
- In 2023, 60% of women invested in the stock market, according to a survey by Fidelity Investments.
While the exact percentage of women investing their money will vary from one survey to another, there is a consistent trend: There are differences across ages, income levels and education status. For example, the 2023 Fidelity survey reported that 60% of women were invested in the financial market; however, the participation rate differed across generations. Generation Z invested at a 71% rate, millennials at 63%, Generation X at 55% and baby boomers at 57%. Similar dynamics were reported in 2021. While 67% of women overall invested outside of retirement accounts, 71% of millennials, 67% of Gen X and 62% of baby boomers did so. A 2022 survey by Bank of America shows differences based on age and affluence. Among affluent households, women younger than 60 (45%) were more confident about making investment decisions on their own compared with those 60 and older (40%). On the other hand, among less affluent households, women older than 60 (39%) were more confident making investment decisions on their own than those younger than 60 (25%).
The Fidelity survey found that while 68% of women were saving for retirement in 2023, 77% of men were doing the same. In 2019, it was 66% of women and 82% of men. A similar survey by Transamerica Center for Retirement Studies conducted in 2022 found the following:
- 60% of women and 62% of men have investments in bank accounts (savings, checking, money market, CDs).
- 47% of women and 52% of men have investments in 401(k), 403(b), 457(b) or similar retirement accounts.
- 35% of women and 37% of men have investments in IRAs.
- 32% of women and 40% of men have investments in brokerage accounts (stocks, bonds, mutual funds, ETFs, etc.).
No wonder that in 2022, BNY Mellon Investment Management estimated that if women invested at the same rate as men, there would be an additional $3.22 trillion in assets under management from private individuals. The gender gap can be attributed to the fact that the investment industry does not engage women as it does men, according to BNY Mellon, with 86% of asset managers saying they are targeting male customers. No wonder, then, that 10% of women feel they don’t understand investing and 29% don’t feel confident about investing. The Fidelity survey found that 27% of women also believe they don’t have enough money to invest. The good news is that these major deterrents for women are solvable with thorough financial education and engagement. However, the gender pay gap plays a significant role, according to a survey by Morningstar, an investment research and management services firm. Morningstar concluded that “most of the supposed differences between men and women investors regarding saving and investment behavior disappeared when controlling for income.”
A 2020 survey by Wells Fargo, a financial services firm, found that women tend to invest more conservatively than men. While 38% of the women surveyed said they were conservative investors, only 27% of men said they were conservative. On the other hand, while only 4% of women said they were aggressive investors, 16% of men said so. “While we have found that male clients tend to eagerly invest in the latest asset class everyone is talking about, like cryptocurrency, female clients do not generally jump on the shiny bandwagon,” according to Meghan Railey, co-founder and CFO of Optas Capital, a wealth management firm. “They tend to take their time to explore investment opportunities and stay in their investments longer.”
The 2021 survey by Fidelity shows that 67% of women invest in individual stocks or bonds, 63% in mutual funds or ETFs, 50% in money market funds or CDs, 24% in environmental, social and governance, or ESG, funds, and 23% in cryptocurrencies. The dominance of stocks and investment funds (mutual funds, ETFs and index funds) and the small number of women respondents investing in cryptocurrency reinforces what Railey said about women tending to have a slower approach to the next big trend. “Men in the United States were nearly three times more likely to own crypto than their female counterparts as of September 2022,” according to Statista, a research company.
The 2021 Fidelity survey shows that while women are confident about their daily financial management skills, they are not as confident about their skills as investors. Although 75% feel confident about balancing a checkbook, only 19% are confident about selecting investments that align with their goals. The situation persisted in the 2023 Fidelity survey. While 52% of men are confident that they are on track with savings for retirement, only 42% of women have the same confidence. Conversely, while only 21% of men are pessimistic about saving enough to retire, 30% of women expressed such pessimism.