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The Gender Agenda: Investing in Women

Published on 11/03/2021

Across the world, gender inequalities are still sadly ubiquitous, from pay and promotions to childcare, household chores, and even in investing. The Gender Investing Gap is a very real gap, showing the discrepancy between the return the average woman gets on her investments in her lifetime, versus that of the average man. But why would this be so?

Well, to start with, women usually earn less than men, and often take unpaid time off due to childbirth and childcare, denting their earning potential and meaning they miss out on promotions and higher pay grades. Women also have differing long-term goals to men - these factors combined ultimately leads to a divide in terms of investment returns. Partly because they have less to invest, and also because they have different priorities, whether raising children or not.

In 2018 a study by the market research firm Kantar TNS found a £15bn gender investment gap in the UK. Approximately £14.3bn in investments were held by women, while £29.3bn was held by men; meaning men were holding almost double the amount of investments held by women. Which in this day and age, feels totally old fashioned.

Another 2018 study conducted by Weathsimple, explored millennials’ attitudes towards money found only 26% of women are investing, compared to 43% of men the same age.

Kantar said the findings suggested investment providers were failing to connect with a female audience - the language and marketing aren’t aimed towards them - meaning financial institutions are missing out on a huge portion of the population, and women are missing out on potential income. Investment and money managers are often perceived to be male-dominated and male-centric, which for many women can make them feel both uncomfortable and excluded.

The study found just 26% of millennial women thought of themselves as having a high level of financial engagement, compared with 55% of men. Women are less likely to talk about money and investing with their colleagues and friends, often feel embarrassed at their perceived lack of financial knowledge, and have other, more pressing priorities, meaning investing gets pushed farther down the list.

On the contrary, in 2020 a Goldman’s study found that female fund managers - whilst hugely underrepresented in the industry - had a better track record at picking stocks during the pandemic lows and highs.

Women are a minority in the investment industry, only 3% of the mutual funds tracked by Goldman for the survey have an all-female fund team - accounting for just 2% of total assets, in contrast, 77% are managed by an all-male team.

But what is being done to make things more equal?

In November 2020, the U.K. government’s DFI, CDC Group, in partnership with the International Finance Corporation, launched a guide to gender-smart investing for private equity fund managers.

This strategy is focused to direct capital to companies that drive gender equality - highlighting companies where women are on the boards, companies that have a gender diverse workforce and value chain, develop and produce goods that focus on women as consumers and operate to negate harm to women in their community.

At Upside, we’re also doing our bit. Investing doesn’t have to be complex, and often it’s a terminology and confidence barrier which is what our app is specifically designed to navigate.

We take our users on an investment journey, personal to them, their circumstances and needs. We have developed a three-pillar approach to investing, from in-house index funds and bundles of themed stocks, through to actively managing your own investments.

Every step of the way is managed based on risk appetite, confidence levels, values and interests, and time. Education underpins everything, with simple, jargon free educational tools woven into every experience.

At Upside we are choosing to challenge, every day. There’s no science to it, it’s just right.

To learn more about International Women’s Day click here.

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